INDUSTRY COMMENT: BHETA


A


t time of writing (mid- January 2024), the cost of shipping a 40-foot container from Asia to the UK has risen by over


350% in ten weeks, from an average of $960 on 31st October to an average of $3,658 on 8th January (Source: Xeneta Shipping Index) – thanks to the attacks on shipping in the Red Sea. Some have been quoted more. The International Chamber of Shipping says 20% of the world’s container ships are now avoiding the Red Sea and using the longer route around southern Africa.


4 Negotiate flexibility in contracts BHETA


logistics business service provider, Daley Hub believes that with the high percentage of DIY related product sourced in China, the DIY sector is impacted even more severely, both in terms of delays to just-in-time production and the cost of re-routing. UK plc will also likely experience inflationary pressures and the domino effect of supply chain instability adversely affecting economic growth, innovation, and competitiveness. We witnessed the effect of rising shipping costs from Asia to Europe in 2021/2022, and just how much the inability to meet consumer expectations of convenience and speed of delivery can impact. Now it seems that for whatever combination of reasons, we cannot view such episodes as ‘one-offs’ – we must take strategic, potentially permanent steps to mitigate the threats to international supply chain. For that reason, BHETA is hosting a webinar with Daley Hub on Wednesday 21st February at 2pm, presented by Clive Daley and entitled, ‘Building a Resilient Supply Chain’. The agenda is very much to the point i.e:  Balance sourcing strategy  Reduce working capital  Negotiate better terms for improved profitability  Look at your ESG and


Check supplier contracts for flexible terms such as force majeure events, providing a legal framework to manage unforeseen disruptions and shared responsibilities. Short term however, this is about joint crisis management, so be prepared to ignore general rules in order to make, deliver and send what’s needed as a priority.


5 Embrace technological solutions


RED SEA ATTACKS: MITIGATE YOUR EXPOSURE


A viewpoint from Will Jones, COO, BHETA - the UK trade association for manufacturers, importers, and distributors who operate in the home improvement and garden sectors.


sustainability criteria In the meantime, here are a few thoughts on actions to take or at least put in motion:


Above: Clive Daley from Daley Hub 30 DIY WEEK JANUARY 2024


Which is easier said than done mid-crisis as airfreight is hugely expensive, the train carries a premium and delays are commonplace. Products already in transit will be delayed by 15 days if going around the Cape, so identifying alternative routes and modes of transport is vital, but not a quick fix.


1 Diversify supply chain routes 2 Strengthen communications with suppliers


Maintaining open lines of communication with suppliers and asking them to prioritise the important lines needed most quickly. This may mean shifting around production.


3 Strategic inventory management


If buffer stocks are possible – which they may not be - explore the option. Otherwise, the most important tactic is order prioritisation.


Leveraging technology is key to enhancing supply chain visibility. Implementing advanced tracking systems, IoT devices, and analytics tools can provide real-time insights into the location and status of shipments. Don’t however be tempted into ‘quick fixes’ with technology. Better to have a freight forwarder who can negotiate shipping availability, fast boats, competitive rates and booking slots.


reducing dependency on a single supplier, identifying alternative sources in different regions.


6 Diversify supplier base 7 Collaborate with industry peers


Pooling resources and knowledge within the industry can be an effective way to negotiate better terms with suppliers and logistics providers.


Reviewing and updating insurance coverage is a crucial step in preparing for unforeseen events. Companies should assess their current coverage, ensuring it adequately addresses risks associated with delays, rerouting, and increased transportation costs, especially in the current climate.


8 Evaluate insurance coverage


The Daley Hub webinar is for BHETA members, or for companies interested in joining BHETA. For more information about this event and about BHETA advice and services, contact the BHETA Member Services team on 0121 237 1130 or visit the BHETA website www.bheta.co.uk.


www.diyweek.net For the longer term, consider


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40