Logistical challenges due to the pandemic continue...
The logistics world has gone through and continues to go through a lot of changes and uncertainty over the last 2 years. Never before seen challenges! The whole supply chain is complex and is sensitive to changes. Goods reach and leave Finn-Korkki through a chain of companies. Typically, our supply chain includes one or more levels of manufacturers of raw material, logistics firms, Finn-Korkki’s production of metal bottle caps, logistics firms, bottling plants (our customers) and then retailers before the packaging made by Finn-Korkki reaches the hands of the consumer.
Logistics firms may provide storage & distribution in addition to transport. The logistical challenges have included delays at border crossings for trucks, delays due to restricted access to factory premises, lack of truck drivers due to covid and in the UK due also to Brexit, quarantine of drivers, seaport & airport closures due to local lockdowns and a shortage of freight containers. Improvisation was and is often the only solution, but this comes at increased cost in time & money.
Combine these challenges with uncertainties of supply & demand experienced over the pandemic years and it is not surprising costs have increased. In the first quarter of 2022 cost pressures have also been added due to fuel. Many road transport companies are now reviewing fuel surcharges every 2 weeks rather than every 3 or 6 months. Transport offers are valid for 30 days rather than 60 or 90 days.
These challenges have had a direct impact on our supply chain, but we are finding solutions to secure supplies of raw materials. For example, pre-pandemic Finn-Korkki held several months of stock to account for a 3-month lead time for some raw materials. Now that lead time can be 5 or 6 months our stock holding has increased to match this. Working capital related to stock has increased accordingly.
However, these actions have allowed Finn-Korkki to secure the supply chain, maintain production and continue to meet our customer’s needs with a short lead time.