The Long-Lasting Effects of COVID-19 on the Food and Beverage Supply Chain

Since the beginning of the coronavirus pandemic, the food and beverage supply chain has had to deal with manufacturing facility shutdowns, the changing dynamics of consumer behavior and price increases.  COVID-19 has directly impacted operations from meat processing to grocery stores, largely because these operations are highly dependent on manual labor.

To help combat these problems, the food and beverage industry has ramped up use of robotics and automation technologies to minimize the impact of labor shortages and forestall potential future crises. 

The industry is dealing with other challenges as well, such as in the partially shuttered restaurant industry.  With the diminished demand for wholesale products, the supply chain has had to make significant alterations to help mitigate food shortages, food loss and inefficiencies.

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Global Competition for Shipping Containers Limit Service of U.S. Imports

Currently, container availability in Asia is severely limited.  Although there is demand to fill the containers, lack of availability is forcing some ships to sail with open slots.  With the strongest increase in 40-foot container demand following closely behind one of the sharpest decreases, up to 75% of containers in one company’s 40-foot fleet are unavailable.

In California, delays are significant.  This is increasing the equipment shortfall and is especially problematic as imports are forecast to remain at record levels possibly into Q1 2021.  This is primarily due to the holiday shopping season.

While it may seem as if there is a shortage of containers, the problem is actually that the containers are out of position due to strong growth of trade in areas including Africa and South America.  To reposition the containers, they will need to transit to neutral locations such as the United States, then aggregated and sent back to Asia.

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Investments in Warehouse Technology Impacted by COVID-19 Pandemic

Seeking to help solve labor challenges arising from the COVID-19 pandemic, more companies have been investing in warehouse robotics technology.  Up 57% from the same period in 2019, warehouse robotics technology has been popular with companies involved in last mile delivery, freight, warehousing and enterprise supply chain management.

Contrarily the overall investment in supply chain technology declined in Q1 2020.  The demand for service-based solutions including Supply Chain as a Service and warehouse marketplaces to autonomous robots are seeing increased adoption, partially due to subscription-based, full service solutions rather than individual unit sales.

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