To our dear Smarteq partners and customers:

We have worked through difficult times, with unforeseen challenges in shipping and logistics impacting our delivery schedule due to the global effects of the pandemic. We have proactively tried to work on active actions to improve the accuracy of our delivery and find alternative paths to mitigate the impact of these recurring delays.

Unfortunately, the ongoing situation in China – with new lockdowns due to the pandemic – new future challenges have arisen. As one of our production sites are amidst this lockdown, our production has been haltered.

We are keeping ourselves updated with any new information regarding the situation in China, but we have foreseen some future challenges which might impact our customers:

  • Due to our production site being closed for the past 2 weeks it might affect already confirmed orders. We ask for your patience and we will keep you updated if your orders are affected by this lockdown.
  • Uncertain delivery dates. For new confirmed orders it should be taken in consideration that delivery date might change once the lockdown is removed. We hope to set a delivery date we can achieve but due to the circumstances this might change.
  • There might occur congestions once lockdown is removed. It will not only create delayed production but also traffic at the harbors and transit points. This will unfortunately cause even further delays.

 

Your understanding and cooperation as a key partner to Smarteq is of high value which we highly appreciate and cherish.

Thank you for your patience.

Sincerely,
Smarteq Wireless AB

To our dear Smarteq partners and customers:

The end of 2021 and this first month of 2022 came with unforeseen challenges in the shipping and logistics industry for deliveries from Asia to Europe, with a remarkable impact in our already delayed delivery schedule.

Here is a short summary on the background of these challenges:

– Loading and ground handling workforce at the transit points getting sick and on leave at the same time the workload unproportionally increased due to higher demand resulted in recurrent delays in traditionally efficient EU points of transit: Hamburg, Rotterdam, Antverpen and Bremerhaven.  
– Irregularity on the booking of available cargo slots due to workforce shortage has also made on-time booked shipments to be on haul at the loading point for over 2 weeks.
– Missed slots for unloading at the transit point forces shipments to wait for next available unloading slot, which can take from 1 day to 2 weeks, or more. Therefore, an announcement of delay with a new, re-scheduled delivery date can and has been delayed again several times.
– This same shortage of staff has left the communication chain by each delay at the carrier a no-priority task, leaving us -and you- with last-minute information on delays and unreliable new dates for re-scheduled deliveries.  
– During the summer-crisis, rail transport mode was taken as the alternative by all industry, skyrocket-increasing the costs within a few weeks and making booked shipments wait over 3 weeks at loading and transit points.
– Sick leave at our own warehouse has forced us to re-schedule already delayed deliveries. 
– Only transport mode unaffected is air freight, though with less routes and fewer carriers, orders booked with airfreight not always are shipped immediately after production is finished.
 

The information we have so far received from our logistics supplier indicate the following scenario for 2022:

Q1-Q2/2022:

Sea freight: We foresee same situation as above mentioned, with transit times between 12 and 14 weeks. Celebration of the Chinese New Year on early February will probably have an impact as well.
Air Freight: No major impact, except for the Chinese New Year celebration.
Rail freight: Expected to be the same long and delayed lead times as in Q4 2021, due to increasing demand, causing bottle necks in their fleet.

Q3-Q4/2022:

We should expect a more favorable transport situation due to reduced demand, given a higher inflation caused by reduced consumption; however, we recommend a conservative approach and keep counting with extended lead times for the rest of the year:

Sea freight:      10-12 weeks
Air freight:       2-7 days
Rail freight:      35-45 days

Higher vaccination rates and redundancy at the workforce may improve the delivery accuracy, though these factors remain outside Smarteq’s control.

Under the current freight and logistic circumstances for shipments in transit from Asia as summarized above, and to avoid the recent chain of delays we have been suffering, affecting our partners and customers, we recommend adding a wandering period of 1-3 weeks to the transit time for the delivery of orders of parts not in stock.  

We foresee these same circumstances to be the case in the moment shipments for orders placed now and ahead will be released for freight. Hence, we encourage you sharing this information with your customer on a timely manner.

We are proactively working on active actions to improve the accuracy of our delivery chain and seeking for alternative paths for mitigating the impact of a recurrently delayed delivery schedule. We need to work closely and align efforts to manage these challenging times, together.

Some of these active actions are:

          Review our high runner stock, for a higher inventory of more parts even if not high-rotating ones.
          Allocate more resources for a closer follow up of the logistic chain throughout transit points
          Encourage our partners to forecast and foresee future demands even without committed orders

Your understanding and cooperation as a key partner to Smarteq is a corner stone in this process, which we highly appreciate and cherish. Please get in touch with your Smarteq Contact to go through this information and to answer any question or comment you may have on this or any other matter we can support you with.

 

Sincerely,

Luisa Burgoa-Narvaez

Smarteq Wireless AB 

Smarteq is closely following up the latest and current events taking place in Asia, the hub of our manufacturing facilities, where we can see instability in the supply of critical raw materials and components for our products, the restrictions implemented and to be implemented in the mobility of the working force from and to Taiwan due to the pandemic and the limited and decreasing availability of freight slots from Asia to Europé.

The immediate consequence of these events is not only a considerable impact on our cost structure and in the stability of our offer in the coming periods but also current lead times (12-14 weeks) will be longer if lockdowns withstand during the summer.

Smarteq has set an action path already on execution to mitigate and manage the impact of these unforeseeable circumstances, and to extend our support to our distributors and customers during these challenging times ahead of us:

  • Smarteq has increased our buffer stock for additional parts of the high-runners, frame ordered, and forecasted parts, even without committed orders.
  • However, it is highly recommendable to review the demand with your customer and end-user, and if possible, establish a forecast for the coming 6-12 months, and place orders accordingly for minimizing the risk of an empty stock or air freight at unmanageable higher costs.
  • Smarteq will review and adjust our cost structure to mitigate the impact in the prices to come, which will have to be adjusted during the coming weeks. As mentioned, higher MOQs and 6-12 months forecasting give a much wider spectrum aiming for less sensitive adjustments.
  • Already this week Smarteq planned relocation of production for non-critical parts and other components to production facilities located in less affected areas. This measure will have a positive impact on our supply chain hopefully by Q3.
  • Smarteq strongly recommends its dear partners and customers to inform your customers and end-users on these conjunction circumstances and the coming impact on the costs and delivery times.
  • By the end of Q1 Smarteq started the evaluation of establishing a manufacturing unit in Europe, as a long-term strategic response to the challenges that arose during the past year.

 

Please get in touch with your Smarteq contact to go through this information and to answer any question or comment you may have on this or any other matter we can support you with.

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