Aditya Vazirani (CEO, Robinsons Global Logistics)
Even as the country gears up to fight the COVID-19 pandemic, the food supply chain for vegetables, fruits and other daily essentials is facing one of the worst setbacks in the midst of a national 21 days lockdown. With over 3000 positive cases and counting, the central government’s call for a total lockdown has been a desperate attempt to control the pandemic that has already claimed thousands of lives across the globe.
While the online food and grocery stores are stepping up their operations so as to supply essentials to the masses, the overall food supply chain is battling a number of challenges to stay functional. These range from a lack of regular supplies added pressure on agricultural and temperature-sensitive food storage and lack of manpower. Even as the end consumers and traders are bracing for the worst, here are 4 factors that are redefining the food supply chain in the country, as it manages to cope with the pandemic and a global slowdown.
1. Ban on Import-export:
With the global health crisis accelerating, most countries have closed their borders, restricting passenger and cargo movement. Additionally, amidst a complete lockdown, manufacturing and other industries remain shut, impacting trade and economy. This has largely affected international trade and the food supply chain that depended on the import and export of fruits and grains to edible oils and certain processed foods, resulting in a major scarcity for Indian domestic consumers. Not to mention the loss of revenue due to a completely non-existent international supply chain.
2. Increased storage for perishables:
The lockdown has caused delays in the supply chain, resulting in a slow movement of raw and processed food, including perishable items. Farmers are already battling the fear of wasted produce due to a near stagnant supply chain and its resulting in enhanced demand for adequate storage space and conditions for these. Apart from fruits and vegetables, other processed food with a shorter shelf life is also occupying space in warehouses, both for temperature-controlled and regular storage.
3. Perception of scarcity among masses:
The uncertainty and the delays in last-mile deliveries and the tendency to stock up supplies has led to a massive surge of demand which is adding more pressure to the already stressed supply food supply chain. Apart from fruits and vegetables, supplies like bread, and ready to eat items with a shorter shelf life, are also scarce while people continue to stock/ save and bulk-buy whenever available. This is creating a bullwhip effect which in the long run is going to be detrimental on the purchasing and supply chain functions of companies and farmers because of the perceived demand.
4. Bottlenecks in last-mile delivery:
With the lockdown and fear of contracting the virus, there have been several bottlenecks in the overall supply chain, including a major shortage of manpower for logistic offices to manning the warehouses. However, the biggest bottleneck has been the last mile delivery areas. With the closure of district borders, extreme precautions at housing societies and serious lack of manpower, from truck drivers to on-field delivery boys, the last mile have been hampered, adding to the already stressed situation.
While the above factors are forcing Logistics and supply chain networks to adapt and rise to the challenges, going forward in order to ensure that if a situation like this pandemic is to arise again companies across all sectors will be working on innovative ways with use of technology to smoothen the supply chain disruptions and have better visibility and communication.
The end goal ideally would be to ensure that the customer regardless of the situation has access to the products they require when they require it without the need of hoarding supplies and making items unavailable for those do require it.