We sat down with Dirk Winkelmann, President of Vanguard Direct, to get an update on the industry and its ongoing supply chain challenges. According to Dirk, there has been improvement in areas such as North America and Europe, however, Asia and Mexico are still experiencing an abundance of challenges.
Overall, Dirk explained that “moving from the COVID years, we’ve seen general improvement in terms of congestion in the ports, however, we are still seeing major issues in service levels.” Service level issues typically include vessels being rerouted by carriers for various reasons, containers being put on different ships, and poor follow-up communications from the carriers all of which ultimately lead to questions such as “where are our containers, and when are they going to be discharged?”
These service level issues are proving to be challenging and negatively affecting the business along with the returns to growers. While the reasons for some of the problems are clear, many are not. We can assume that a combination of staffing and equipment issues, along with a need for better monitoring and communication protocols, are contributing to these problems.
Winkelmann explained that another current issue in the industry is a very high rate of cold treatment failures when importing goods into the United States. Container cooling units have probes attached to temperature sensors that are inserted into grapes to ensure proper temperature control according to the cold treatment protocols. The challenges with the process have ranged from the container’s cold units failing to probes being placed incorrectly, all of which are ultimately service issues.
When containers arrive with cold treatment failures, they can sometimes restart the cold treatment protocol, however, there are other cases where containers must be shipped to a different port from that of the original destination to redo the treatment. This has led to delays of several weeks for containers to arrive once again to the final destination port in those instances.
While many of the current issues are outside of Vanguard’s control, Winkelmann notes that from a customer’s perspective, “Any failure in the process is our failure.” To minimize disruption in these still uneasy waters, Vanguard is taking some extra steps in the export process including reviewing carrier challenges and breakdown points and playing a more active role in probe placement and communication protocols with the carriers. In addition, “we are going through some port realignment, some of which will be customer driven.”
Overall, Winkelmann explained that this problem is not specific to the produce industry, as “shippers of perishable and frozen commodities worldwide are struggling with service.” Dirk recapped by explaining that “we have very good visibility on the flow into North America, pretty good visibility on the flow into Europe, and everything falls apart in Asia.” Following our last update, it is evident that progress has been made, but there is still work to be done.
Every day is different at Vanguard; with new growers joining our community, new crops and fresh varieties being introduced, and new markets opening. Keep up to date with what’s happening in our expanding world.