Supply Chain Disruption The Bullwhip Effect. The Supply Chain has been profoundly impacted by COVID-19. The ability to procure raw materials, transportation restrictions and manufacturing impacts, combined with downward price pressure has resulted in the ‘bullwhip effect’. This is where small changes at one end of the chain turn into big ripples at other Supply Chain layers. The previous twelve months has seen significant changes turning into insurmountable obstacles. We’ve seen artificially low freight prices in play for several years, now real pricing is being implemented and impacting the ability of goods and services to be released in the market. Customs Brokers and Freight Forwarders Federation of New Zealand, Rosemarie Dawson confirms, “In December 2020, freight costs soared by 289%.” The severe lack of freight capacity has positioned New Zealand importers and exporters in direct competition with global companies for freight. Empty containers leaving New Zealand are now worth more to these companies than ones filled with our produce.
12
