October 2021 Logistical Update for BSG HandCraft Customers

Monday, October 11, 2021

An Overview of Today's Shipping Challenges, and Planning Ahead for Q4 2021 and Beyond

TOP STORY: Additional lead time recommended when placing orders

As we move into the last few months of 2021, the BSG Logistics team has provided another update on the challenges facing the North American freight market. For those just looking for the bottom line:

TL; DR: BSG recommends a 72-hour lead time when placing orders and allowing for an additional 48-hour buffer between planned delivery arrival and “drop-dead date.”

For a more in-depth look at the global factors affecting freight and supply chain and a synopsis of the current landscape, please read on:

Less Than Truckload (LTL) Shipments

TOP STORY: LTL tonnage forecasts are at historically high levels and LTL carriers are struggling to keep up

The Less Than Truckload (LTL) market continues to be challenged due to a resurgence in manufacturing, along with extremely strong consumer spending in retail and e-commerce transportation-intensive industries.

Overall, it’s becoming harder for many businesses to not only stock up on goods but keep their shelves stocked to meet increasing consumer demand. Plan for LTL networks to continue to be full and stressed for the balance of 2021.

On-time deliveries are extremely important to BSG and one of our ongoing service metrics. Throughout the past year, we have aggressively sourced capacity and been able to maintain an on-time delivery metric that is 13% above the national average.

We are also excited to announce that we have launched an additional courier direct program within our Atlanta market. BSG customers in that area are now able to take advantage of the same courier direct program we have in place in several other local markets, which includes an average on-time delivery of 99.5% as well as a 99% damage-free shipment rate.

Full Truckload (FTL) Shipments

Vessels anchored at sea awaiting berth into the port of LA

TOP STORY: Demand imbalance forecasted to persist into 2022

Full Truckload continues to see disruption as it absorbs excess volume from both LTL and Rail markets. Currently, there is an average of 6.5 loads for every reported available truck within the US, which is an 11.9% growth since August.

Although challenging, BSG has still been able to reduce year over year per lb FTL costs, particularly when working with customers to build in greater lead times to their orders. In 2021 BSG sourced more full truckload contract rates than ever before and will continue to reduce rates as much as possible.

Import Ocean Containers

TOP STORY: Tight capacity on shipping lines brings record rates & delays

100% of ocean capacity has been deployed globally, but increased capacity constraints continue to plague the industry. The port of Los Angeles, Houston, & Savannah continue to experience the greatest delays across North America. But continued congestion at Midwest rail hubs is also influencing ocean carrier strategies for inland moves of full containers.

As of September, there were 432,909 twenty-foot equivalent containers waiting to be unloaded outside the port of LA. To put that into perspective that’s more than the port of Charleston handles in four months and what Savannah handles in two.

While BSG is proud to provide industry-leading customer service, there are unavoidable setbacks in our operations that are caused by (but not limited to) several setbacks in global trade. To help better visualize the challenges the industry is facing the video below will help outline the factors that led us to where we are today:

What We Can Do

BSG continues to actively source additional capacity and establish relationships with new carriers. We realize that on-time deliveries are a critical metric for many of our customers and to that end, we strongly suggest the following:

- When possible, allow for 72 hours of additional lead time when placing an order. We see this as very important to have for our customers to not experience inventory delays.

- Once an order has shipped from BSG’s warehouse allow for a 48-hour buffer between planned delivery arrival and your “drop-dead date” – when you must have the product on hand to brew or on the shelves for customers. This will help reduce any major impacts on your brew schedule or shelf cycle.

- Provide BSG with a forecast on major changes to your current order quantities so that we can work on securing additional capacity. Also, consider increasing safety stock on your staple ingredients.

- Plan in additional time for any special delivery requests such as liftgate, call-ahead, or straight truck delivery.

Within this historically challenging market, we are hopeful that our efforts to equip, educate and serve our customers are still allowing us to offer best in class service levels. If you have any questions or feedback, please reach out to the BSG Logistics Group at BSGLogisticsGroup@bsgcraft.com

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