Domestic and international issues in logistics are causing suppliers of the UK aftermarket a major headache.
One of the problems is a shortage of sea transport due
to a combination of events, including snarl-ups at UK ports, similar problems in ports across the Far East, a shortage of shipping containers and capacity issues in terms of getting containers on boats.
“The global container crisis has proven to be the greatest challenge for many, and while freight costs have escalated – by nearly a factor of 10 in some cases – the big issue has been capacity” said Julian Goulding a Marketing Manager at Delphi Technologies.
“We’ve been able to adopt alternative supply routes for some of our products, perhaps switching to road freight in some cases, and we’ll continue to adapt as the situation evolves,” he added, noting that stockists are keen to switch between brands with the best availability to ensure supply.
Toby Whewell, a Director at friction supplier Juratek, also noted concern that the price and scarcity of shipping shows no sign of abating for the next few months, due in part to Christmas and Chinese New Year adding pressure to an already-buckling system.
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“Juratek took the decision early on that the most important thing was to have the stock, so we have not backed off on our ordering; in fact we have increased it due to all the other pressures,” he said, explaining that a typical order from China used to have a three-month lead time from the factory, followed by 35-40 days to ship. It can now take up to nine months.
Whewell added that once on these shores, issues with couriers mean service levels have slipped in some areas, while the cost of sending goods has increased, due to the courier companies increasing wages to retain drivers.
Brembo has also been working with UK customers ‘to ensure orders are transported with minimum disruption’. However, UK Manager Siti Abdullah suggests the situation is likely to get worse in the UK before it gets better.
“In 2022, the UK Government expects imports from the EU to be subject to the same requirements as applied to goods imported from the rest of the world, so Brembo is currently working closely with our UK customers to again prevent disruption,” she said.
Getting the balance right is tricky, according to Whewell.
“A conundrum is that with increased lead times, how much do we need to order, as with our growth rates, our daily sales rate will look different in nine months from how it is now. We have taken the stance that it will be better to order more than the forecasting mechanism suggests, as without the product to sell, growth is not achievable”.
These supply issues come with a price of course. Apart from the rising shipping costs, the price of raw materials has been volatile, with such as steel and aluminium rising in price, although precious metals
have fallen since peaking
in May and June.
John Roughley, Marketing Director at First Line Ltd, owner of Borg & Beck, says: “Naturally, with the increased cost of freight affecting everyone,
and the rising costs of raw materials, customers will see the effects reflected in the pricing when the costs become too much to absorb. However, in terms of availability, Borg
& Beck is committed to maintaining extremely high levels to service the needs of its distributors in the independent aftermarket.”