Packaging Production and Supply Chain update: Jan 2022

With 2022 now upon us, a number of our customers are now in the throes of planning production for the year ahead.

Our January ‘22 supply chain update provides the latest snapshot of market conditions to aid in your decision-making. Overall we are seeing the disruptions of 2021 starting to ease as nations and industry develop strategies to mitigate the impact of COVID-19.

In this update we cover three key areas;
1. Chinese New Year (23rd Jan → 10th Feb)
2. Production lead times
3. Global logistics update

With the Year of the Tiger fast approaching it would be remiss of us not to remind you how this will impact production lead times and global supply chains more generally.

Our manufacturing network is experiencing a surge in production orders leading up to, and after the Chinese New Year, as has been the case in previous years.

The holiday will run from 23rd Jan 2022 to 10th Feb 2022.

How this might affect your orders:

  • Manufacturing will not operate during this period
  • Freight forwarder warehouses will be closed for a portion of this period
  • Other administrative teams will be available intermittently during this period

Our manufacturing facilities are busy ensuring orders are completed before the CNY cut-off, as well as preparing for the production backlog after the holidays.

Please see our latest updates on production lead times below:

Average production lead-times

Average sea-freight delivery timeframes

Table 1. (Delivery timeframes as of January 12th, 2022.)
** The average delivery time from production completion to being delivered.

China

  • An increased amount of cargo during the pre-Chinese New Year rush has increased shipping prices throughout January 2022
  • Capacity and sailings are limited relative to demand and port congestion continues

US

  • Ports at Los Angeles and Long Beach expect additional congestion amid further COVID-19 outbreaks from the Omicron variant
  • There is a slight reduction in inbound backlog cargo at LAX/ORD/JFK terminals, which has had a positive effect on export demand

Australia/New Zealand

  • Some carriers have increased airline capacity to cater for cargo movements during the New Year
  • A New Air NZ Cargo terminal fee structure has been introduced this month, which may see an increase in terminal handling fees for import air cargo

Europe

  • A reduction in consumer travel has provided extra freight capacity delivering some much-needed stability in air freight rates.
  • Smaller cargo sent via air freight is recommended, as this is where rates and solutions can be optimised.

Over the last 12 months, the team at Grounded have worked to strengthen our ability to meet the needs of our customers and the changing landscape by;

  • A reduction in coDeveloping alternative supply chain capability
  • Establishing raw material inventory storage facilities in key hubs
  • Doubling down on our technology investment to continue to deliver savings in time, energy, and resource for our customers

The recommendation to all our customers remains, to place production orders as early as possible to help mitigate increased lead times and ensure timely delivery.

For those who have further questions please feel free to reach out to your Account Manager. Our team is in daily contact with our partners right across the supply chain to monitor movements and mitigate delays.