FEATURE: SUPPLY CHAIN & LOGISTICS


SUPPLY CHAIN: HOLD TIGHT, WE’RE IN FOR A BUMPY, LONG RIDE


A


lmost 15% of global seaborne trade and up to 30% of container traffic passes through the Red Sea. Since


November 2023, the Houthis have been attacking commercial ships in the area, forcing shipping companies to use a considerably longer route around the southern tip of Africa instead. Typically, this is adding 14 to 18 days extra sailing time. And that, of course, pushes container costs up. With the majority of garden machinery being produced in the Far East, and using the Red Sea route, this is bad news for suppliers, garden equipment retailers and their customers, all of whom are already feeling the pinch from the cost of living crises.


Air strikes on Houthi targets in


Yemen have been the US and UK government’s response to the Red Sea attacks, and UK warships have been deployed to protect merchant ships, but the Houthi attacks continue, seemingly undeterred. When these attacks will cease is


difficult to say, but to assume that everything will swiftly return to normal when they do, and prices will come down, is a mistake; and a potentially expensive mistake at that.


20 DIY WEEK FEBRUARY 2024


Mark Moseley, Sales & Marketing Director at garden machinery supplier Handy, warns DIY and garden retailers of the perils of pricing on container costs alone, and suggests actions suppliers can take to support retailers in the face of spiralling prices and uncertainty.


Escalating prices There is an obvious commercial cost when running a vessel for 14 or 18 days longer than planned, including fuel and insurance costs, which is passed on to the customer. But that’s only part of the picture. With the disruption to shipping vessel schedules, the number of ships on the water increases, meaning the number of free vessels to load containers on to is significantly impacted. With space at a premium, costs rise further. In the case of garden machinery,


there is also the seasonal nature of sales to contend with. Goods must be landed for spring. A further fly in the ointment is Chinese New Year in February, when all the factory workers return home and production stops. A large proportion of garden machinery is made in China, so it is absolutely vital that orders are fulfilled before that date. Even in a standard year, when not faced with a shipping crisis, it is frequently a race against time to try and get goods on the water.


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When combined with capacity issues, it’s a major headache and can further impact costs.


Domino effect


Even when on the water, and with the delays factored in from the longer route, that’s not the end of the supply chain woes. The rerouted ships are arriving at ports at unscheduled times, when berths are no longer available. They either have to anchor and wait for a berth


to become free, or are rerouted to unload at a different port, sometimes in an entirely different country. So, supply chains become clogged further and costs mount, as product has to be transported from ports further afield. The delays are compounded by ships having to dock at ports in a different order from that scheduled, meaning the containers will no longer be stacked in the right order. The entire cargo may have to be


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