Supply Chain News Update

Supply Chain News from around the globe. This week Tony Hines looks at the continuing CO2 production problems for the UK Food Industry returning to a story that hit the headlines back in August 2021. CF a US company has two fertilizer production plants in the UK one at Ince near Warrington and the other in Durham. CO2 which is a byproduct of fertilizer production is sold to the UK Food and Drinks industry. It provides most of the supply. The UK Government provided a financial package back in August that kept supplies moving. The cause of the problem is the high cost of energy forcing CF to stop production of Fertilizer. Now the financial package has ended and there is no sign of lower priced energy CF intend to stop production once again to cut their cost. This will cause problems for the UK Food and Drinks Industry unless a solution is found.

On a visit to his local supermarket Tony Hines noticed that in-store space had been reduced. On further investigation he discovered that this is down to supply chain disruptions as stores are reclaiming more space for onsite storage for goods. He followed up by looking at the demand for warehousing space during the past year. You can find out more listening to the episode.

Inflation is pushing up prices in the US and UK. Year on year at the end of 2021 it was 6.2% in the US and 5.4% in the UK. Supply chain disruptions have added to the woes. This is likely to continue pushing up the cost of goods during the first half of 2022. Production problems due to Covid 19 along with port delays, slow turnaround of container boxes, transportation and increasing fuel and energy costs are likely to ensure inflationary pressures persist in 2022. Added to this is the threat of Russia moving into Ukraine and the impact that this will have on supply chains causing severe disruptions to some critical products including commodities and energy. Wholesale gas prices are likely to remain high as a consequence. For countries reliant on gas for a high proportion of their energy for industry and domestic supply this will cause product shortages and higher costs for everyone. The energy market is what economists refer to as an oligopolistic supply controlled by a relatively small number of organizations. This means that o

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About Tony Hines and the Chain Reaction Podcast – All About Supply Chain Advantage
I have been researching and writing about supply chains for over 25 years. I wrote my first book on supply chain strategies in the early 2000s. The latest edition is published in 2024 available from Routledge, Amazon and all good book stores. Each week we have special episodes on particular topics relating to supply chains. We have a weekly news round up every Saturday at 12 noon…