Challenges in the supply network

Challenges in the supply network

Challenges in the supply network

28 Sep 2021

One other side effects of the Covid pandemic has been the disruption of world trade and we are all feeling the effects now.

Covid pandemic undoubtedly changed the world in many ways. Besides the tragic loss of life, people have adapted to the new realities, i.e working from home, advances of the e-commerce and changes in the world trade.

Since the start of lockdowns around the world, peoples' spending habits have changed. Demand has gone through the roof since the expandable incomes have increased. The new reality has put incredible strains on the production and transport networks as the demand outweighed the supply and the supply has been limited due to the Covid related issues.

On top of these, the transport network is facing empty container crisis. The trade wars as well as production related issues in the world's biggest exporter, China, have resulted the lack of empty containers at origins.
Majority of the world trade relies on sea freight. Before the pandemic, the shipping companies were not very profitable and did not invest in new equipment, vessels or capacity.

However, once the demand has increased during the pandemic, they were totally unprepared and the freight charges have increased massively. Currently importing 1x20ft container from China to UK is more than 10,000 USD whereas it used to be 1,000 USD before the pandemic.

On top of all these problems, there are issues in the UK side. As you probably know, lack of drivers is causing considerable issues for the movement of goods within the country.

As both an importer and manufacturer, we are not immune to these problems. The lead times have become much longer than before, the costs have increased considerably.

However, we are constantly monitoring the situation and in contact with our overseas suppliers, agents and shipping companies just to make sure that our imports do not get delayed.