29/07/2024
SEA FREIGHT ON THE RISE.... AGAIN !
Summer is typically a downtime for the UK Automotive Battery Industry as end user demands softens a little, however as an importer and wholesaler we are busy planning for the season to come with factory lead times anything from 3 to 6 months, this needs to be done in the early summer.
Whilst battery prices has been relatively stable over the past couple of years when sea freight reduced to normal levels post covid, there are now some external forces beginning to impact costs.
The continued issues in the Red Sea and diverting of Container Ships from Asia around South Africa is now starting to make an ongoing impact on costings. Initially the extra costs of this were nominal, but we had to deal with the extended lead times. However, now this coupled with very strong global shipping demand with little to no spare capacity in the shipping network. The results of which is now causing a tripling to quadrupling of sea freight to date.
This has a direct impact of around 8-12% to the landed cost of product which will be starting to make its way through the system over the next few months to add to the already present issue of increased shipping time due to the diversions.
This is something that will be felt across many other industries and may keep the UK inflation figure a little more stubborn than expected.