A Portsmouth company has a unique view of the current breaks in the global supply chain.
Loftware, located at the Pease International Tradeport, is the leading worldwide supplier of enterprise labeling software that ensures shipments and packages get from point A to point B as efficiently as possible.
Its president and CEO, Robert O’Connor, said in a recent interview that a “perfect storm” of circumstances — from overburdened ports to lack of workforce in Asian factories — threaten delivery of even the most basic goods such as food items. He cited factors related to the Covid-19 pandemic and even pre- Covid conditions.
“It is a confluence of many factors that have lasted back to pre-Covid, and then Covid made things worse,” he said.
The recent easing of Covid-related restrictions has increased the consumer’s appetite to spend, putting a strain not only on the production of goods in factories worldwide affected by the pandemic, but a strain on the supply chain’s ability to get products to store shelves or to a consumer’s front door.
“The demand is back,” said O’Connor, “but the supply is not.”
“Underlying all of those issues and the common element of all of those is Covid,” added O’Connor. “While we’ve gone through supply shocks and demand shocks in the past, this was much more consistent and much more pronounced and really coming to a head.”
Loftware has more than 5,000 customers worldwide, representing a wide range of industries, including life sciences, manufacturing, food and beverage, retail, automotive, consumer products, apparel and more.
In January, NiceLabel, a leading developer of label management systems with its headquarters in Slovenia and with offices in Germany, USA, Singapore and China, merged its operations into Loftware.
“It does allow us to now be, by far, the global leader in the (shipping label) marketplace,” said O’Connor.
Addressing the logjam
The supply chain meltdown has had a cascading effect of economic principles. As supply has dwindled, prices have gone up and keep going up, setting off a round of inflation.
Over the last 12 months, the consumer price index — which the U.S. Department of Labor uses to measure inflation — increased 6.2 percent. Federal data show retail sales hit $625.4 billion as consumers returned to shops, bars and restaurants, after months of Covidinduced confinement. Gasoline sales were up 38 percent compared with the same period in 2020, but so was the price of gas, according to AAA. The national average for a gallon of gas is $3.35, up 7.5 cents from a month ago and $1.08 per gallon higher than a year ago.
The choke on the supply chain has some people concerned that certain gifts for the upcoming holiday season will be delayed or not available altogether.
Over a two-day period in mid-October, Loftware hosted a virtual conference, Convergence 2021, that attracted some 1,000 companies from 85 countries to talk about trends in labeling and the supply chain — what O’Connor described as a “massive gathering.”
According to O’Connor, it will take the efforts of all the partners in a supply chain to get out of the current logjam. It’s not something labeling alone can solve.
“A few things they came up with are supply chain agility, that people really have to be able to move facilities, move manufacturing more quickly,” he said.
“Labeling plays a big role in that, because if you’re not able to label the right products at the right time in the right facility, then you just can’t produce them.”