Customer Notice Additional Pressures
We want to highlight the real additional pressures we are dealing with that you may not be aware of, which will affect our business in the short term.
Availability of Raw Materials
Due to the lag in demand during the first few months of 2020 as companies shut down or reduced production, raw material such as steel, copper and plastic have shot up in price since demand has switched back on. This has caused raw material prices to surge ahead of pre-Covid prices and is impacting the pricing of finished products.
Container Shipping and Supply
Ocean and Air Freight:
There is now a critical situation regarding ocean and air freight shipping, an unprecedented chain of events has collectively created market conditions never previously experienced.
Due to the Covid pandemic UK ports are under staffed (Social Distancing, furlough and redundancies) and unable to cope with the resurgence in the volume of container ships needing off-loading. With significant numbers of empty containers stuck at UK ports and shipping liners being unable to off-load, carriers made the decision to cut the capacity for the UK market in favour of serving more lucrative routes.
As a consequence to this the carriers are now controlling space made available to the UK market and exorbitantly increasing freight rates. In November 2020 market rates from Asia to the UK were in the region of USD $2,400.00 per 40’ container, now they are quoting around USD $12,000.00 and above. This still does not guarantee that the container will be off-loaded once it has been placed on the vessel.
UK hauliers are experiencing the worst recorded levels of container arrival dates being changed on a daily or weekly basis, often with very little notice.
Stock Concerns and Prices
This “Perfect Storm” of events could not have come at a worse time and is not anticipated to improve until March 2021 at the earliest. To continue to be able to supply core product lines we have had no choice but to pay the massively inflated prices. Products that are in containers which are affected by the increased freight costs will need to have their sales price reviewed so that we can remain economically viable going forward.
We’ve traditionally relied on forward-forecasting of costs from our supply-chain, working weeks and months ahead where possible, to avoid sudden price increases. However, with the situation now changing almost on a daily basis this has becoming increasingly difficult and indeed some of our suppliers are now operating on POA basis or not notifying us of increases.
Specifically we are experiencing price rises of over 20% on 2020 prices for 3mtr and 6mtr strut, coupled with delays in supply.
We trust these price reviews will be temporary and as soon as new stock arrives without the increased freight costs we aim to revert back to our more competitive pricing structure.
We're Here to Help
Note although we are seeing increases of 20% from our suppliers, this is not what we've passed on to our customers. Although we can’t give the notice that we have done previously, any price increases from Fixmart will be notified to you in advance.
If you have any concerns or questions, please contact your account manager directly. Alternatively you can contact our Sales Support Team via: [email protected] or 01322 274226.
Many thanks for your custom and we look forward to supporting you through 2021.
PS. Here is an interesting article from Construction Enquirer regarding the additional pressures we are currently seeing in the market: Concern Mounts Over Key Materials Supply Bottlenecks.