The shipping crisis hasn't entirely gone away, says BMA chief executive Tom Reynolds. Things have been rough - and they're about to get rougher.
Bathroom retailers, designers and manufacturers have faced several significant challenges over the last two years. The COVID pandemic restrictions, labour shortages and supply issues all converged to create a perfect storm – but despite the odds, we thrived. Perhaps against the odds, 2021 saw BMA members achieve a record-breaking sales year.
We now seem to be facing even more significant challenges with the economic headwinds. Yet the global shipping crisis has not entirely gone away. There has been a wave of industrial action across Europe. The eight-day strike at Felixstowe forced carriers to divert vessels to already congested hubs in Northern Europe. Unite says that further strike dates would be set if pay negotiations failed.
In addition, drought and power shortages in China are causing the closure of factories along the crucial Yangtze River commercial corridor. Add to the mix that up until a few months ago, around 40% of China was still in lockdown; any prolonged disruption could likely have a further knock-on effect on supply chains.
While the high demand following the pandemic seems to be easing, and container prices are finally softening, the chaos caused by port congestion keeps costs for importers at a high level. Supply chain disruption will continue to affect manufacturers and retailers, hurting profitability as we navigate the post-pandemic climate.
Thankfully, container rates are coming down rapidly following 18 months at an extortionately high level. However, the congestion at some ports will still mean there are demurrage charges, and carriers are still blanking sailings to keep prices up.
In facing these challenges, the KBB industry must remain transparent with customers, being open about delays, stock availability and pricing while maintaining excellent customer service. All parts of the sector need to understand where the supply chain risks lie, monitor them, and have a plan in place for mitigation.
Worldwide government collaboration and intervention may still be necessary. All countries' economic achievement depends on the stability of global supply chains, and the pandemic laid bare vulnerabilities. The UK is an importing nation, so the current port disputes need an urgent settlement to close our current shipping woes. But beyond that, our policymakers should make strategic decisions to build more resilience into our country's economically critical supply chains in advance of the next crisis.
I suppose if we have learned anything during the last three years, jumping from Brexit into a pandemic, into energy and inflation pressures, it's that crises of any nature can hit at any time. We are not out of the woods yet, and the sector and our political leaders must be prepared for further challenges.
