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INDUSTRY

BIG ASK

Navigating the rough seas ahead A year ago it would cost around $2000 to ship a 40-foot container between China and most European ports; today the cost is anywhere between $8000 and $10000. A perfect storm has resulted in sea freight prices rocketing, but how will this impact the office products industry?

Peter Cowan, procurement

for somewhat longer. Further to this, the sheer congestion in

director, Data Direct

the major UK ports means that they are physically unable to

Sea and air costs have been a huge factor throughout 2020, and

move empty containers back onto vessels to send to China. Ships have been decommissioned as ocean carriers to cut

will certainly continue for the next

capacity when demand is low, ensuring maximum yield from

three-to-four months. Increases in

any floating stock which is still active; lack of crew has also had

airfreight costs are obvious – ‘belly’

some influence. Even though clothing, etc., is down in sales,

Space, the space in the ‘belly’ of

people are shopping like crazy for new gadgets, home offices

passenger flights - is down by 80% as

and general home improvement – most of the stuff we import

passenger numbers have plummeted. In terms of seafreight, we have hit the absolute perfect storm - a combination of COVID-19, Brexit and the time of year. Freight always sees a massive boom for the Christmas

– so there is still a high demand. We are already experiencing shortages of many products, but importers have now adapted their procurement cycles to allow for increased transit times, and we are no different. The

sales, but now there is also the additional stockpiling ahead

shortages should soon start to ease as the transit machine

of Brexit. These factors, combined with lower staff levels due

starts to operate more efficiently, and new processes and

to distancing and other safety measures, new/slower customs

systems are honed to perfection.

processes, a huge imbalance of imports v exports and the fact

As a result of all these challenges, everybody has to be

that any PPE shipments will always be prioritised, make for

prepared for some disappointment. Whether it be the new

the perfect storm. With carriers being over-booked by around

PlayStation, or a fusing unit for a printer – plan purchases as far

50%, supply and demand does its work and prices increase

ahead as possible, and don’t over-promise until your supply

exponentially.

chain has been confirmed. Having detailed discussions with

Just to add to the carnage, Chinese New Year at the end of January will bring the next phase, and will keep prices high

[16] JANUARY 2021

www.dealersupport.co.uk

your suppliers will help to alleviate the bumps in the road. As always, plan for the worst and hope for the best!

Profile for Intelligent Media Solutions

Dealer Support January 2021