511 - Special Market Update - June 2021

Summary Takeaways Industry is experiencing higher rates of inflation than have been felt for more than a decade, and supply chain cost escalation and performance inconsistency are posing significant operational challenges to businesses entering the post-pandemic economy. ▪ To ensure the continuation of supply to customers, Importers and Distributors are incurring higher costs to ship products. ▪ The rate of inflation in Canada for 2021 is currently annualizing at 3.4%, its highest annualized level in a decade. (globalnews.ca) ▪ Entering the summertime heavy shipping season, industry experts predict that trans-Pacific shipping rates will skyrocket in June and aren’t likely to stabilize until port congestion eases and shipping berths become more plentiful. (Vespucci Maritime) ▪ The Pandemic exposed numerous points of fragility in the global supply chain and recovery is likely to take many more months. Current cost increases are being driven by Covid-related dislocations in the transportation market and while things may get worse before getting better, we don’t expect this environment to be permanent. ▪ 511 Foodservice is working to mitigate this crisis by prioritizing critical cargo, increasing collaboration with freight forwarding and cargo ship partners, exploring and developing alternat port-of-discharge options, and fully leveraging our manufacturing and carrier networks.

511 Foodservice Recommendations for Customers

We are working hard to provide information and insight that puts our customers ahead of the curve and customers should use this information to take necessary actions, react and manage accordingly.

Look for product-mix refinements to offer your value-oriented customers that object to price increases.

Plan orders carefully, with the focus on buying available products and marketing and selling what you buy.

Monitor and research industry information sources for forecasts on raw material and supply chain costs.

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Work closely with your customers to understand their demand and plan your inventory investments accordingly. ✓

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