Pandemic disrupts flow of goods
For a global company like the Adam Hall Group, investing in excellent global trading networks that have been developed over years or decades is one of the key success factors. China is not only the most important partner in foreign trade for the whole of Germany, the Adam Hall Group also relies on personal relationships with reliable suppliers in the People’s Republic, the second largest economy in the world after the USA. This in turn benefits the customers of the German manufacturer, which provides professional and contemporary event technology solutions with innovative technology to its business partners worldwide.
The global crisis in the wake of the Covid-19 pandemic has clearly shown people in all situations how fragile, yet otherwise functioning, global supply chains can be. German companies continue to experience this, due to the significant supply bottlenecks in countless areas even today. These challenges have also impacted the Adam Hall Group.
The breakdown of supply chains and the Suez Canal bottleneck
The majority of trade between world markets has always taken place by sea. In the course of global lockdowns, some of which lasted for months, the international supply chains were severed at all critical points – right up to a complete standstill in the flow of goods. While there were bottlenecks with the loading of ships in China, the cargo ports in England and the USA faced massive delays with offloading because there were no employees. The result: misallocation of containers and a vicious cycle that was difficult to break, whereby bottlenecks became increasingly severe and reduced the on-time performance by more than half.
Shortly after the global situation somewhat improved, the Suez Canal incident happened resulting in immense financial losses worldwide. With the ship Ever Given blocking important shipping traffic, passage between the Red Sea and the Mediterranean came to a standstill for a week. Many of the ships waiting for passage ended up waiting even longer to be offloaded at port or for empty freight containers to become available. The economic consequences affect, not least, all the companies that depend on planned deliveries.
Price increases due to supply bottlenecks
The blocking of the Suez Canal will continue to cause delays and turbulence in shipping around the world, as CEO of Hamburg’s Port Logistics Group HHLA, Angela Titzrath, explained to the Munich Club Wirtschaftspresse, according to the news agency Reuters. Freight prices could not remain stable for this long and have increased tenfold on the Asian routes. In addition, there are further bottlenecks in transport logistics, which, according to economists at the European Central Bank, are primarily due to the lack of freight containers. In its current forecasts, the IFO Institute in Munich therefore also expects more price increases resulting from supply bottlenecks in numerous sectors. Finally, the short-term coronavirus outbreak in the Chinese metropolis of Guangdong in June 2021 led to the temporary closure of the fourth-largest container port in the world located there, causing further freight jams and the overloading of sea and alternative freight routes.
Customer satisfaction is the top priority
Markus Jahnel, COO and Managing Director of the Adam Hall Group: “Unforeseeable supply bottlenecks of goods ordered long ago are unfortunately also affecting us. We are aware of the current situation, which is extremely unsatisfactory for all customers and partners and which has also drastically highlighted to us how vulnerable international supply chains can be in the event of global shocks. Unfortunately, our large warehouse capacities at various international locations will not help if the goods simply do not arrive as planned.”
Of course, customer satisfaction is always the top priority for the Adam Hall Group, and the event technology company is constantly working on optimising production processes and delivery times. Nevertheless, one ultimately depends on external factors and unpredictable situations that cannot be planned or positively influenced – including the extreme increase of raw material prices, on which chip production also depends. Here, too, the Adam Hall Group is making a comprehensive effort in regards to alternative sourcing and production methods, all the while maintaining legal standards such as CE marking.