Lakes Comment: Q4 2020

Mike Tattam, Sales & Marketing Director Lakes is BMBI’s Expert for Shower Enclosures & Showering.

Leaving the EU with a last-minute deal made supply problems more difficult, but it didn’t create the worldwide shipping problems which are affecting availability and prices.

As Covid spread across the world at the end of Q1 2020, there were widespread lockdowns. So shipping companies left ships in ports around the globe, along with sailors and containers. Anticipating a slow recovery, they also cut capacity. Now, a shortage of containers worldwide and unexpected, unprecedented demand is creating bottlenecks in many ports and driving prices skyward.

In normal years, companies importing from China order well ahead of the Chinese New Year to ensure continuity of supply. New Year is a big event with factories closing from 11th-17th February. This year UK importers ordered more, anticipating a hard Brexit.

UK container ports such as Felixstowe and Southampton bottlenecked in January. With containers waiting to be shipped or hauled away by road, and many stocked full of PPE supplies just waiting, there’s little room to unload ships. Seeing long queues of ships waiting to unload, other ships sailed on to other ports and looked in on the way back.

Some freight forwarders refused to ship to the UK until it returned to normal, while carriers were reluctant to take bookings for the UK because of the congestion. Container freight rates (for a 40ft High Cube) have rocketed in response, reaching $15,000 by the end of January 2021, from $1,675 in August 2020.

In response to these extraordinary costs, some companies are sweating stocks, gambling that container rates will have come down by the time they need to resupply. According to Maersk and Hapag Lloyd, that’s not likely in the short term, so those businesses are likely to have supply problems in Q2 2021. Others are adding temporary surcharges which will be removed when rates return to normal.

Aside from supply problems, demand for bathroom products is constrained by the closure of showrooms during lockdown. However, merchants and retailers without transactional websites can use online showrooms, such as Lakes Online Showrooms, embedded on their websites to generate and respond to demand. Customers can browse remotely and contact staff directly to ask questions or place an order. Selling doesn’t have to stop because showrooms close.

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