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Global Supply Chain Crisis

Global Supply Chain Crisis, the analysis of Michele Sisto from Alfrus

The international market, which seemed now ready for economic recovery after the pandemic’s end, is now facing another global crisis. It is universally recognized as the Global Supply Chain Crisis and it spares no economic sector.

Small and medium-sized enterprises but also large businesses that live on international trade, are the victims of this crisis.

The collaps of ports, the costs’ increase, the raw materials’ lack and obviously the delays in shipments and in commerical transactions. These are the main features of this crisis that affects the logistics but doesn’t spare the production and the sales section of italian, european and international enterprises.

Alfrus is decisively facing this situation. An imperative for those who work and process almonds mainly from California which, after reaching our factories in Italy are then shipped to the main confectionery and food companies in Europe and in the world.

We analyzed the situation with Michele Sisto, Logistics Manager of Alfrus.

“The situation is complex – emphasizes Sisto, also member of the Board of Directors of the company specialized in almonds processing – and it takes decisive and timely interventions like those we are currently implementing in order to face up to the commitments taken towards our customers”.

What characterizes the Global Supply Chain Crisis and what caused it?

“We are facing a global crisis that affects the logistics sector, but not in an exclusive way, and that concretely leads to delays in deliveries, considerable increase of costs and difficulties in finding the raw material in time and in the quantities expected. The reasons are different and have overlapped creating a situation that has already become internationally burning for the market, for industries, for suppliers and therefore for consumption.

Definitely the Covid19 pandemic has affected it, because in its early days it blocked the economy and the commercial exchanges. With the health emergency’s decline, however, there has been a rapid recovery of consumption, unexpected by large international economic observers. The increase in consumption has consequently intensified production and therefore the demand for raw materials. Because of this situation, the logistic field has been blocked, facing the deficiency of berths and free containers. This has triggered an upward race in rental costs. The classic gap that happens when supply and demand are not balanced”.

In this already complex situation, how has the ongoing war in Ukraine affected?

“It was another factor that created instability for international markets due to the general increase in energy and fuel costs. The consequences have been immediately felt in the logistics but also in the enteprises’ production costs”.

How is Alfrus coping with the Global Supply Chain Crisis?

“Today, the Californian ports are congested, as a matter of fact the ships wait several days before they can dock and start unloading and loading. This obviously creates delays in international shipments. The Governor and the Californian port Authorities are considering the construction of new docks in order to speed up the container ships’ unloading and loading operations, giving the opportunity to ship their own products to local companies, the same products that, already sold, are collecting in the warehouses.

However, at Alfrus we have immediately picked up the signals of a system close to the collaps and because of this, thanks to our Californian partners and reliable suppliers, we have implemented several intervention strategies. Specifically, these days, we are working unrestrained in order to expand the berths for almonds stuck in Californian ports”.

Will this crisis have consequences on Alfrus’ customers?

“We will keep all the commitments without making customers feel that increases and delays are a burden. Reliability is one of the most precious values for us and we want to keep guaranteeing the best to those who choose us. I can’t deny that the moment is difficult and affects every economic actor but we are doing our best in order to keep protecting our partners, as we have always done”.

31 March 2022