Coffee takes two to three weeks longer to reach Croatia than before the Houthi attacks on cargo ships in the Red Sea, but so far this does not disrupt production or distribution in the HoReCa channel. It flows normally in that channel, and no one has yet complained about difficulties in supply because producers, trained during the corona crisis, have prepared for surprises and the impact of force majeure. However, force majeure can cause unpleasant surprises and problems in distribution and transport, but there is also a response to this, primarily in some provisions of contracts to minimize adverse effects on the business of all participants in the HoReCa channel.
Adaptable and Active
According to Marija Vrančić, the Procurement Director at Franck, the company has no difficulties in sourcing raw materials and supplying customers with Franck products in the HoReCa channel. They have stocks, and they have included provisions related to the impact of unforeseen circumstances on delivery times in contracts with business partners.
Vrančić points out that the closure of the Red Sea, and consequently the Suez Canal, significantly complicates the transport of goods from Asia to Europe as it extends delivery by two to three weeks. Since the largest shipping companies have redirected their ships around the Cape of Good Hope, circumnavigating the entire African continent is a new route for delivery to European ports such as Antwerp, Rotterdam, Algeciras, and Valencia. This has congested the ports because ships from Asia that come for transshipment no longer use ports like Port Said, Piraeus, and Istanbul, which are the first after passing through the Suez Canal, but sail directly to Western European ports. At the same time, Antwerp, Rotterdam, Algeciras, and Valencia also receive goods from South, Central, and North America, further congesting them.
– So far, we have no difficulties in delivering to customers and successfully managing stocks, but continuous changes in the global supply chain may require adjustments in operational strategy or business practices to effectively deal with potential unforeseen circumstances and future challenges. Therefore, we continue to actively monitor the situation and prepare for any future challenges to ensure stable supplies and business continuity. When it comes to contracts with business partners, we have included provisions that take into account the impact of unforeseen circumstances on delivery deadlines. This practice is usually part of our contracts to ensure transparency and reliability in cooperation – explains Vrančić.
