Freight is still the main issue

FREIGHT AND LOGISTICS It’s an upside down world SageZander - Yarn Supplier UK

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No-one is certain of anything other than short-term uncertainty when it comes to trade and logistics at this moment in time. We are in increasingly choppy waters clinging on to a hope of more clarity after we have entered the new year. There are some key issues:

  • Container space and shipping schedules
  • Brexit and the fear of logjams at UK ports

Globally the cost to move containers has increased markedly in the last 2 months. There is a shortage of shipping containers, one only has to look at the 40 foot containers of PPE sitting at Felixstowe which are estimated to be costing the UK taxpayer £1 million per day just to keep them there as they have no-where else to go. Not forgetting the port surcharges importers are compelled to pay to get goods through the Uk ports. Some shippers are even refusing to go to some UK ports preferring others due to the expected delays.

The UK isn’t alone; food imports into certain countries undergo more rigorous customs control for infection due to covid and this again causes disruption. Typical costs for shipping a 40 foot container from Asia to Europe or the USA have risen significantly between September and to mid December. Expectations are for further ongoing rises maybe through January, that’s assuming you can find a container to fill!

Even trade between Asian countries has seen shipping price rises of 5 or 6 fold over the last couple of months. The regular sailing schedules are slightly more erratic as a knock on effect.

In essence this will eventually filter through into material prices. In our industry case mainly depending upon the type of yarn and how many kilos of it fill a container.

Meanwhile, Brexit is still a grey area! Ireland has always used the UK as a landbridge to get to mainland Europe. Sending goods by truck through the UK and then out into Europe has always been quicker and cost effective. New direct services from Rosslare and Cork to Dunkirk and Zeebrugge have been recently established to avoid the UK ports after the end of December. However Irish business still doesn’t think it has sufficient capacity and many trucks will still need to pass through the UK as now. Let’s hope at least for something towards a partial Brexit solution. If we don’t as the anglers amongst us know it wont be the first time supposed intelligent men have been outwitted by fish!

The next 2-3 months look to be challenging before things settle down again. Lets hope there is some Brexit conclusion that can mitigate some of this uncertainty all businesses currently face

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