Dolphin Bay’s clients have become much more informed and proactive in dealing with logistics challenges over the past year – an excellent development for our industry.
This follows the unprecedented shipping challenges that followed the global economic rebound from Covid-19 restrictions. In all my time in the industry, I’ve never experienced the level of change we’re now seeing. It is the first major shake-up of supply chains since globalisation became a major force.
Many timber treaters are now planning their imports of CCA chemical and other materials much more timeously, realising that shipping challenges are here to stay. Treaters are also taking a greater interest in how their supply chains function, tracking their cargo, and investigating how to get it delivered as quickly as possible.
Dolphin Bay engages regularly with our customers to keep them up-to-date about the shipping situation and help them to plan.
Given the massive logistical upheaval we are facing, scenario planning has become a crucial risk-mitigation tool for the Dolphin Bay team. Demand and supply planning are core aspects of scenario planning: now, more than ever, it is vital to know what is happening in all the countries to and from which we export and import.
This has required enormous amounts more research, planning and risk management than in previous years, but enables us to change course as quickly as possible when the need arises.
As a supplier, we are re-evaluating the supply chain constantly, engaging with shipping agents, investigating all the routes that shipping companies use, considering which are the most efficient and evaluating whether we could do better in taking over the shipping responsibilities from some clients and suppliers.
We continue to use warehouses at all South African ports, to ensure that we have CCA stock available for export at whichever port is shifting cargo more rapidly at the time. We are also constantly doing risk-benefit analyses to work out whether to stop shipping our CCA to certain countries in Africa, given the exorbitant shipping costs and long delays we are experiencing, and take on the considerable risk of trucking it to customers instead.
While certain logistics problems we experience in Africa are caused by local factors, most are global. For example, truck manufacturers and repairers are suddenly facing microchip shortages, as microchip supplies are being taken up by the personal computer markets, resulting in shortages in other industries.
At some companies, production lines have ground to a halt due to shortages of parts.. Dolphin Bay has struggled to get spare parts for our trucks, again due to chip shortages in the motor industry, and at times it took months to get a truck ready to transport our cargo.
Consumers in South Africa have been hard-hit by rising shipping costs and delays, as prices of imported goods has risen considerably, and shops ran out of certain products. However, it has been worse in the United States and United Kingdom, where truck-driver and labour shortages added to the hold-ups. There were times this year when filling stations in the UK ran out of petrol and diesel, and supermarkets ran out of fresh fruit or meat. In the US, some products were not available for purchase after being launched, as manufacturing slowed down unexpectedly.
These problems are not as severe nor as widely discussed in South Africa although, unusually, Christmas decorations failed to go up in supermarkets in October – possibly because some goods just didn’t arrive in time.
The rand-dollar exchange rate is often cited as the cause of rising costs in South Africa. However, the bottlenecks in supply-chains also play a large role.
The logistical challenges we’re facing are likely to continue for the next year, as part of the massive changes of our era.
At Dolphin Bay, we remain confident of our ability to adapt to ever-changing environments and find the opportunities that, given our tireless search for them, will inevitably arise.
Source: Dolphin Bay Chemicals
