Logistical logjam: How are international shipping issues hurting the dietary supplement industry?

Nutritional Outlook, Volume 25, Issue 2

Even if you’re not a big company, you can take certain steps to lessen the impact of today’s supply chain impediments.

If you’re in the business of dietary supplements, or virtually any other business for that matter, international shipping and supply chain delays have become a fact of life. In fact, a White House blog from June 2021 stated, “These shortages and supply-chain disruptions are significant and widespread—but are likely to be transitory.”1 Of course that was seven months ago, and supply chain issues still exist.

The Problem Continues

An October 2021 article from The New York Times was less optimistic, but perhaps more realistic, in its title, “How the Supply Chain Broke, and Why It Won’t Be Fixed Anytime Soon.”2 According to the article, much of the world’s manufacturing capacity is based in Asian countries and some European countries, all of which were hard hit by COVID-19, causing many factories to shut down and/or reduce production. This had a domino effect, and supply chain disruptions have continued.

In some cases, raw materials were available, but logistics were the issue. For example, early in the pandemic, commercial airline flights were canceled or significantly decreased. Considering that many raw materials were shipped in the storage section of planes alongside luggage, that meant those raw materials were unable to reach their intended destination in a timely manner.

Though it may seem that enough time has passed for many of these issues to have been corrected, the reality is that delays continue to plague the nation alongside the pandemic. A recent January 2022 article3 from the World Economic Forum indicates that challenges relating to the COVID-19 pandemic, including delays and disruption, are still affecting the worldwide supply chain. In fact, supply chain turmoil was identified as the greatest threat to company growth and countries’ economies, according to many chief executives.

This was well summarized in the article: “Two years into the pandemic, the global supply chain continues to sputter and break down. Each day comes news of choked ports, out-of-place shipping containers, record freight rates, and other problems that cause disruption and defy easy answer.”

The Dietary Supplement Supply Chain

This January, my company, NutraScience Labs (Farmingdale, NY), a leading provider of turnkey dietary supplement manufacturing services, conducted a survey of dietary supplement brand owners. The results showed that 9 out of 10 brand owners surveyed indicated they’re currently experiencing a disruption in their supply chain.4

In September 2020, a Nutritional Outlook panel of webcast experts likewise offered one expert’s opinion that this volatility would continue for another 12 months.5 Then in May 2021, Nutraingredients-usa.com shared that pandemic supply chain issues were likely to continue for up to a year.6 Other industry sources have made similar predictions. Yet here we are early in the first quarter of 2022, and supply chain issues are still problematic.

What Now?

Understandably, we all want an answer to the question, “When will it end, and what can we do to overcome delays?” Unfortunately, the first half of this question is unanswerable in any meaningful way. As shown in prior paragraphs, various industry experts have taken their best shot at an answer, but new coronavirus variants and issues related to them have made seemingly reasonable predictions unreliable. However, the second half of this question may have a better answer. While we can’t accurately predict the timing for a return to normalcy in the supply chain, we can take steps to mitigate the problems associated with supply chain delays.

According to the World Economic Forum, some companies are solving storage problems by buying their own warehouses, while some shippers are making their own containers when they can’t find any, and some companies are chartering vessels when they can’t book with ocean carriers.6

Of course, these solutions are not necessarily viable options for smaller companies, but there is still much that can be done as a good workaround for dietary supplement brand owners in overcoming shipping delays. First, brand owners need to get very granular when it comes to demand planning, doing their very best to accurately estimate demand for each of their SKUs over a 12-month period. In fact, it’s better to overestimate then underestimate need as the pandemic supply chain problems continue.

Second, brand owners need to work closely with their manufacturer, providing the demand plan as far in advance as possible, and determining the best time to place purchase orders so as to give the manufacturer plenty of advance notice for purchasing the needed raw materials and componentry. In fact, placing blanket purchase orders may help facilitate the process of assuring sufficient time to avoid out-of-stocks due to supply chain issues. Even if you’re not a big company, you can take these steps, thereby placing your company in a better position than your competitors.

Gene Bruno, MS, MHS, RH (AHG), is a certified nutritionist and registered herbalist with 42 years of dietary supplement industry experience. With a master’s degree in nutrition and a second master’s degree in herbal medicine, he has a proven track record of formulating innovative, evidence-based dietary supplements. Mr. Bruno currently serves as both the vice president of scientific and regulatory affairs at NutraScience Labs and professor of nutraceutical science at Huntington University of Health Sciences.

References

  1. Helper S, Soltas E. “Why the Pandemic Has Disrupted Supply Chains.” www.thewhitehouse.gov blog post. Published June 17, 2021.
  2. Goodman PS. “How the Supply Chain Broke, and Why It Won’t be Fixed Anytime Soon.” The New York Times. Published Oct. 22, 2021.
  3. Al Essa TS. “5 Ways the COVID-19 Pandemic Has Changed the Supply Chain.” World Economic Forum website. Posted January 14, 2022.
  4. LinkedIn post. “Is Your Supplement Brand Currently Experiencing Supply Chain Disruptions?” NutraScience Labs LinkedIn webpage. Posted January 2022.
  5. Grebow J. “COVID-19’s Impact on the Dietary Supplement Supply Chain: How Good Are Your Supplier Relationships, Your Forecasting, and Your Credit?Nutritional Outlook. Published September 29, 2020.
  6. Shultz H. “Pandemic Supply Chain Issues Likely to Persist for Many Months, Experts Say.” Nutraingredients-USA.com. Published May 21, 2021.