Hello, Jeremy here! I wanted to share a quick update with you from our side on what we're seeing in our supply chains.
Undoubtedly, you won't have been able to dodge the 'click-bait' style headlines about shortages of food, fuel, and C02. Whilst these stories tend to be inflammatory, they do come from a position of truth.
What we're seeing...
The main issue we’re facing are delays on large palletised orders of frozen fish. The lack of HGV drivers across Europe, scaled-up border processes and covid restrictions have created a challenging situation. Luckily, we foresaw this being an issue and started planning our Christmas fish in July/August. As an example, a Turkish supplier of ours who normally has a 3 week lead time has now expanded to 12 weeks. If all goes to plan, and allowing for the new XL lead times, we should have all of the frozen fish we need to buy for Christmas in our cold store by 1st November.
Some areas of the seafood industry are struggling with labour. For example, one of our long-time crab suppliers needs 80 staff to pick their crab meat and at the moment they can't get more than 40 consistently. As a result, they have stopped supplying frozen customers like us to focus on the local fresh customers. We buy crab from four different suppliers so we can balance supply issues. But for some smaller more niche lines where four suppliers aren’t available, you can see a potential bottleneck approaching.
The UK shellfish export industry is having a hard time with new rules for sending shellfish into the EU which has until recently been their primary market. A recent quote from a shellfish exporter is stuck in my mind "it's easier to send lobster to China than France".
Whilst the situation is difficult, a combination of pre-planning and the fact that we sell only frozen fish means we will have ample stock to see us through until 2022. As I'm writing this we're very close to breaking a record for the amount of fish we've got on stock and that's going to continue to climb until 1st November.
Packaging, fuel, and C02
As you hopefully now know, this year we transitioned to a cardboard recyclable box to replace poly boxes. This was a great development for us and our members. But, paper and cardboard do come with their own complications. They call it the 'Amazon effect'. There has been a huge recent demand increase for card and paper following the popularity growth of e-commerce purchasing. This has meant that our prices have gone up twice in three months and the lead times have lengthened. In a similar vein to the fish, we have started stocking up on what we need to see us through until early 2022. We've installed plenty of racking so that we can store 300 pallets worth of flat-packed boxes which should be ample to see us through a bumper Festive period.
Frozen carbon dioxide is dry ice. As you know, we use dry ice to keep our parcels frozen in transit through the DPD network. Last week there was a major shortage of C02 in the UK. We buy our dry ice from the largest supplier in the UK and they were not immune to the struggle. They had to cut some customers' allowance of C02 (mainly liquid form) in order to share it out.
Back in 2018, there was a serious C02 shortage and we were cut off from supply for 4 weeks - you can imagine this was a tough month. As a result of this we entered into a contract which would protect our supply in future abnormal situations; to the best of their ability. I'm pleased to say we are only one year into a three-year supply agreement. So whilst I was worried about the C02 situation I would have been more worried if I was a casual customer as I was back in 2018.
As a last resort backup plan we have been experimenting with different forms of gel ice which we think would be an acceptable alternative in the event of a total C02 shut down. We hold about 1 month's worth of gel ice on stock in the unlikely event we would need it.
I thought I'd mention this as it's on the tips of everyone's tongues this week. I was initially worried that DPD our carrier may have some issues with fuel. Thankfully I have been reassured that this won't be the case as they have reliable fuel supplies.
DPD update - "Please rest assured that despite the panic buying, it is 'business as usual' for DPD's collection, delivery and sortation operations. Our fuel supplier is continuing to make on-time deliveries direct to DPD depots and hubs nationwide, ensuring that our on-site fuel tanks are fully stocked and that our 13,000 vehicles can continue to deliver for you and your customers, without disruption."
We're doing our best
There are complications in the supply chain and companies are having to adapt to best navigate these issues, we’ve had our fair share of these. But, I hope that if you’ve made it this far through my update you can see that we take these issues seriously and we’re getting ahead of them as best we can. We are planning for a spectacular Christmas with new lines, awesome festive recipes, and 7 days a week delivery and we want you to be a part of that.
All the best,