How are logistics companies faring amid ongoing disruptions?
Amid a constantly shifting situation in the Middle East, Kuehne+Nagel breaks down the state of play for logistics companies in 2024.
ATTACKS ON vessels in the Red Sea have led to the part-closure of a major transportation route, impacting all commodities, including wine and spirits.
Transit times have been extended for between 10 to 27 days due to rerouting around the Cape of Good Hope, leading to major repercussions downstream.
The situation remains unresolved, and even if a solution were to be found, it would take at least two months before vessels could assume normal rotational patterns. So how are logistics firms dealing with the delays?
Global transport company Kuehne+Nagel has its finger on the pulse when it comes to all things logistics, and the current disruptions are no exception.
Horst Mueller, global head of VinLog, the company’s drinks arm, says that the situation remains uncertain. “Predicting the trajectory of transportation costs in 2024 remains challenging due to ongoing global events that disrupt the flow of goods,” he explains. However, it is not all doom and gloom for wine and spirits shipments, with more positive trends on the horizon.
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The Covid-19 pandemic was the previous cause for major disruption, but those issues are continuing to clear. “The return to pre-Covid levels of normalisation is expected to continue into 2024,” Mueller says. Customers have restocked their inventories, which are also back up to 2019 levels.
CONSTANT TRENDSETTER
The US remains a “constant trendsetter” on a global scale as the largest consumer market, Mueller says. And bulk wine is seeing more interest from major markets worldwide, particularly from producers in the Southern Hemisphere.
Sustainability remains a key pillar in every business, and an eco-conscious shift in the wine and spirits industry ensures its future, even in the face of current conflicts. Kuehne+Nagel won the Best Logistics and Supply Chain Green Initiative award at the drinks business Green Awards 2023, after procuring 23 zero-emission trucks in one year alone. The company has now developed a digital platform that provides visibility on shipping choices, encouraging customers to opt for routes with lower carbon emissions and to make more environmentally-friendly selections. Choosing between economic factors and environmental sustainability is also a thing of the past, as Mueller says the cost of implementing eco choices is “minuscule” when considering the cost per bottle.
The company is dedicated to making the decision to become greener easier for its customers. Mueller says: “As an organisation, we are dedicated to offering innovative approaches that benefit our customers and the environment.”
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