It’s getting tougher for FMCG firms to navigate pandemic-hit last mile


The spread of the Omicron variant has started to adversely impact last-mile distribution and import of components, raw materials and finished products for several Indian consumer goods companies, multiple industry executives said.

Executives said there is a 10-15% impact on operations of distributors, wholesalers and retailers in the fast-moving consumer goods industry with several people falling sick mostly in the cities where the spread of infection is more.

This has forced distributors in several markets to replenish stock in stores once a week with higher order volume in each delivery, since demand has grown for some products like packaged food and staples due to pantry loading.

At the same time, there has been 7-10 days delay in shipment time for products from China and Hong Kong due to quarantine rules in ports, lockdowns and increased congestion.

Container charges have again touched an earlier peak after 10% reduction last quarter, while air freight from Hong Kong has also hardened by 10%, executives said.

“There is an impact on last-mile operations of FMCG distributors and wholesalers in most markets due to Covid infection,” said Mayank Shah, senior category head, Parle Products. “There has been no impact on supplies and sales yet due to these disruptions, since retailers are buying in bulk each time with demand for essentials having suddenly gone up.”

FMCG companies are encouraging distributors to take orders from kiranas over phone or through apps to tide over the situation, while in certain areas in large cities, where some distributor workforce may have been badly impacted, retailers are even picking up stock from distributors like they did in the first wave, executives said.

“With rising cases, a few kiranas may shut down temporarily but demand will not be lost as consumers shift to other neighbouring stores,” said Dhairyashil H Patil, president of All India Consumer Products Distributors Federation that services millions of kiranas for most consumer goods companies.

Companies dependent on imports said supply chains are getting affected with shipment time going up, container rates back to earlier peak after some softening in October-December quarter.

Lockdowns and severe restrictions in China to counter Covid-19 outbreaks have affected port and airport operations such as those in Tianjin, Xi’an, Shenzhen and Ningbo-Zhoushan near Shanghai.

Appliance maker Haier India president Satish NS said that the shipment time from China has gone up from about 20-25 days to over 30 days and rates have again touched the earlier peak.

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