Takeaways
Q2 2022 Market Update
SUMMARY: Supplies will continue to cost more, arrive slower, and flow less predictably from factory to consumer through 2022 and well into 2023.
▪ Covid outbreaks continue to slow and disrupt production and shipping from Asia, and equipment and personnel shortages are keeping ports, warehouses and inland transfer hubs in North America clogged and trucks behind schedule in delivering goods. ▪ Inflation reached four-decade high of 7.9% in the United States at the end of Q1, and a thirty-year high of 4.8% in Canada. US Federal Reserve economists forecast inflation to remain high but stabilize in 2022 as planned interest rate increases take effect. ▪ Restaurants are rebounding as mask and dining capacity restrictions are eased, though pace of progress is tempered by labor and supply shortages and inflation in the cost of operations. ▪ Products reliant on petrochemicals for manufacturing will cost more, as will shipping, due to spiking energy cost resulting from the Russia – Ukraine war. ▪ Product lead-times are stretching further as the ground freight system 511oss North America struggles with log-jammed train & truck transfer facilities and worsening shortages of drivers and equipment. ▪ Ghost kitchen popularity is opening new doors to growth for distributors that offer product, packaging and service mix tailored to these production-oriented operations.
511 Foodservice is Your Dedicated Partner to Tackle Every Challenge!
511 Foodservice works to identify and alleviate Supply Chain and product availability risk:
• Our global manufacturing network and product sourcing teams continue to identify and implement supplier and substrate options that keep prices as stable as possible, and product flowing smoothly and seamlessly. • Ocean shipping options that ensure timely delivery are a core deliverable of 511 and our team of experienced professionals who work to secure optimal freight rates and routes to bring your products to your facilities. • Significant investment of money and time made since 2020 to improve 511’s domestic warehousing network is paying dividends with improving first-time order fill rates and stabilized shipping expense.
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