In recent weeks we have seen a steadily growing number of suppliers impose surcharges on the goods they supply. These surcharges have ranged between 5% and 10%. We regret that we have no alternative but to increase products prices for the suppliers affected from Monday, 20th September 2021. We will naturally reverse these price increases once the surcharges no longer apply.
The imposition of surcharges reflects the continuing escalation in transport costs, something we have experienced throughout 2020, and particularly costs relating to:
As the below chart shows, there has been a very rapid growth in shipping costs. Shipping lines are now charging freight rates at 450% of their January 2020 level. In short, this has been due to a severe worldwide physical shortage of containers and some short term events (such as the the closure of the Port of Yantian due to COVID and a vessel accident which knocked out capacity in the port of Kaohsiung).
The Road Haulage Association (RHA) estimates there is a current shortage of around 100,000 HGV drivers, affecting all industries beyond the well publicised problems for the food retail sector, and this is currently pushing up pay HGV driver pay rates and overall transport costs.
The fundamental problem is that more drivers are leaving the industry due to retirement than are being recruited. Combine this long term issue with the suspension of driver testing during 2020 due to the pandemic, European nationals returning home post-Brexit, and more recently absences caused by summer holidays and COVID self-isolation requirements, it is easy to see why this problem has come to the fore.
It is expected that transportation costs will remain high for the rest of this year and well into 2022.
Many products in common cleaning and hygiene use originate in part or in whole in the Far East. This includes janitorial equipment (mops, buckets and so on) and notably PPE (gloves, aprons, and so on). In addition to surcharges, there are already significant delays in obtaining some goods with resulting stock shortages.
The current situation remains fluid and we are working with our suppliers to ensure that we mitigate to the fullest extent possible any price rises due to surcharges. We will speak directly to customers where this problem may impact upon them materially and seek appropriate solutions.
We are fully committed to removing all price increases due to surcharges at the very earliest opportunity.
Please contact your account handler if you would like more information.