Red Sea Red Warning

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Two industry names have added their words of warning that a there is a new threat to supply chains and freight costs which could cause shortages and price increases – the attacks on vessels in the Red Sea.

Richard Gyde, MD of hardware supplier Mila says: “We were just getting used to a period of relative stability after Covid and the ongoing conflict in Ukraine but it seems to be coming under increasing threat from the spate of attacks on ships making their way to and from the vital Suez Canal transport link. I think the market needs to be alert to some potential warning signs ahead.

We’re seeing a growing number of freight companies deciding to switch to safer but significantly longer (10-15 days at sea), alternative routes as a result.

“UK importers are likely to be looking at delivery delays and rising transport costs – because it doesn’t just take longer for containers to arrive here but also longer for them to be shipped back empty ready for their next cargo.”

Home made

Bohle’s managing director, Dave Broxton, reckons another round of shipping delays will further diminish the desire to be reliant on the Far East for cheap products – longer journeys for cargo going round the Cape of Good Hope will add $1 million just in fuel per container ship.

Broxton says: “We have recent examples of sky-rocketing prices for shipping containers, the heavily delayed cargo (which including component parts for the glass and glazing industry) and the impact this had on companies and their ability to fulfil their promises.

“When things go wrong, the cost benefit of cheap imports disappears. And if you can’t deliver goods, you or your customers lose money because they can’t manufacture or install products.

“This is precisely why Bohle invested heavily in its own product design and manufacturing capabilities in recent years and worked hard to overcome Brexit barriers to importing from Europe.

“We move huge volumes of goods from our warehouses in Germany on a weekly basis. We send vehicles over to collect those goods and bring them into the UK. We handle all the paperwork, we handle all the customs duties and we hold strategic stocks in the UK.

“When we get demand for products, we can adjust our manufacturing output and inventory to meet that demand. We avoid the situation waiting for weeks and weeks for a product manufactured in China or elsewhere in the Far East.”

Mila

Gyde says: ”We’re already being quoted prices which are up 175% compared to last year and we are hearing talk of the dreaded freight surcharges once again. We are keeping a very close eye on developments and will be updating customers directly as soon as we have more news.”

Bohle

Broxton concludes: “Ultimately, as an industry we have relied on cheap imports for too long. We have even factored in the failure of cheap imports into our costs. We should look for trusted supply partners that can be relied upon closer to home.”

Picture: Dave Broxton and Richard Gyde believe attacks in the Red Sea on container ships could cause supply chain issues in the glass & glazing sector.

www.bohle.com

Article written by Cathryn Ellis
28th January 2024

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