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Day: 15 July 2021

LPG forklift overcomes diesel legislation

Posted on by David Priestman

For many operators of forklifts, an IC engine truck offers a great solution. Hard to beat in round-the-clock operations they thrive in tough conditions. But new legislation due to be introduced in the UK looks set to deal a mortal blow to diesel as a fuel source.

“That’s why the LPG-powered Mitsubishi GRENDiA ES is taking the market by storm,” explains Stewart Gosling of RDD, exclusive importers for Mitsubishi Forklifts Trucks in the UK. “It delivers significant  benefits over diesel and uses up to 40% less fuel than competitor LPG trucks.

“Where the customer really wishes to stick with diesel, our robust and powerful new 3.3 litre engine maintains its high-power output and performance in any situation. This is in contrast to many competitors who have opted for much smaller engines that are simply underpowered in many applications.”

Overall, though, the economics are shifting customers towards LP Gas or even electric solutions. So what’s the problem with diesel and, more importantly, what’s the solution?

The problem lies in two pieces of legislation that will hit diesel customers in different ways. Firstly, strict new Euro Stage V emission standards have forced lift truck manufacturers to fundamentally redesign their engines. This has incurred huge costs which must eventually be passed onto you, the customer.

Secondly, from April 2022 the tax relief on red diesel in the UK will end, massively increasing running costs.

“That double whammy is making truck users explore other options,” says Stewart. “LP Gas is an attractive option because many drivers are familiar with IC engine vehicles and operationally, they offer the same non-stop convenience as diesel but with none of the issues associated with DPFs (Diesel Particulate Filters).”

Cost savings, low emissions

“The reason Mitsubishi GRENDiA ES is proving so attractive is primarily cost,” explains Stewart. “With class-leading fuel efficiency, managers responsible for forklift operations can expect to achieve savings running into tens of thousands of pounds over a 5-year term.”

Mitsubishi says its GRENDiA trucks are also exceptionally clean running and comply fully with the Euro Stage V standard thanks to a closed-loop, three-way catalytic converter. Such is its focus on safety, that Mitsubishi Forklift Trucks has fitted this as standard to all GRENDiA LPG models for over 12 years. It is the industry leader in reducing hydrocarbon and carbon monoxide emissions, eliminating 95% of dangerous NOx gases.

“The other key factor in the decision-making process is reliability,” emphasises Stewart. “Mitsubishi Forklift Trucks is almost totally alone in designing and manufacturing its own industrial engines, giving high power at low revs.

“This contrasts with the majority of truck-makers who use a modified car engine with rubber timing belts, and small car starter motors, which can be catastrophic when they fail.

“Indeed, every component has been designed with dependability in mind, from the chassis, mast and drivetrain down to the smallest bearing. So what you gain in greater cleanliness and fuel efficiency, you also gain in lower maintenance costs.”

LPG forklift overcomes diesel legislation

Posted on by David Priestman

For many operators of forklifts, an IC engine truck offers a great solution. Hard to beat in round-the-clock operations they thrive in tough conditions. But new legislation due to be introduced in the UK looks set to deal a mortal blow to diesel as a fuel source.

“That’s why the LPG-powered Mitsubishi GRENDiA ES is taking the market by storm,” explains Stewart Gosling of RDD, exclusive importers for Mitsubishi Forklifts Trucks in the UK. “It delivers significant  benefits over diesel and uses up to 40% less fuel than competitor LPG trucks.

“Where the customer really wishes to stick with diesel, our robust and powerful new 3.3 litre engine maintains its high-power output and performance in any situation. This is in contrast to many competitors who have opted for much smaller engines that are simply underpowered in many applications.”

Overall, though, the economics are shifting customers towards LP Gas or even electric solutions. So what’s the problem with diesel and, more importantly, what’s the solution?

The problem lies in two pieces of legislation that will hit diesel customers in different ways. Firstly, strict new Euro Stage V emission standards have forced lift truck manufacturers to fundamentally redesign their engines. This has incurred huge costs which must eventually be passed onto you, the customer.

Secondly, from April 2022 the tax relief on red diesel in the UK will end, massively increasing running costs.

“That double whammy is making truck users explore other options,” says Stewart. “LP Gas is an attractive option because many drivers are familiar with IC engine vehicles and operationally, they offer the same non-stop convenience as diesel but with none of the issues associated with DPFs (Diesel Particulate Filters).”

Cost savings, low emissions

“The reason Mitsubishi GRENDiA ES is proving so attractive is primarily cost,” explains Stewart. “With class-leading fuel efficiency, managers responsible for forklift operations can expect to achieve savings running into tens of thousands of pounds over a 5-year term.”

Mitsubishi says its GRENDiA trucks are also exceptionally clean running and comply fully with the Euro Stage V standard thanks to a closed-loop, three-way catalytic converter. Such is its focus on safety, that Mitsubishi Forklift Trucks has fitted this as standard to all GRENDiA LPG models for over 12 years. It is the industry leader in reducing hydrocarbon and carbon monoxide emissions, eliminating 95% of dangerous NOx gases.

“The other key factor in the decision-making process is reliability,” emphasises Stewart. “Mitsubishi Forklift Trucks is almost totally alone in designing and manufacturing its own industrial engines, giving high power at low revs.

“This contrasts with the majority of truck-makers who use a modified car engine with rubber timing belts, and small car starter motors, which can be catastrophic when they fail.

“Indeed, every component has been designed with dependability in mind, from the chassis, mast and drivetrain down to the smallest bearing. So what you gain in greater cleanliness and fuel efficiency, you also gain in lower maintenance costs.”

Interroll to expand Baal manufacturing site

Posted on by Keith McKinley

Interroll has laid the groundwork for a significant expansion of its product portfolio at its site in Baal-Hückelhoven, Germany, near Düsseldorf, by acquiring a neighbouring plot of land. The new property, which is already home to an industrial building, covers a floor area of almost 13,000 sq m. As early as 2022, Interroll will introduce a new platform for hygienic food processing and logistics from the site and consistently expand it in the coming years.

“The expansion, which will increase our production area at the site by around 40%, will be ready for operation in the third quarter of 2022,” says Hauke Tiedemann, head of the Global Center of Excellence for drum motors in Baal. “In this way, we are creating the conditions for the introduction of innovative conveyor solutions that are specifically suited for use in hygienically demanding environments, such as food processing. This enables our customers in this important area to further increase productivity while improving hygiene in their material flow.”

In recent years, Interroll has already successively invested around €20m in the Baal-Hückelhoven site. The Group’s Innovation Projects and Development Center (IPDC) and the Interroll Academy, which is responsible for internal and external training measures, are also based there. Around 240 Interroll employees now work in Baal. By 2025 at the latest, the site expansion and strengthening of expertise for customers in the food industry is expected to add around 60 jobs.

“With this investment in one of our most important sites, we are once again confirming our long-term growth course, with which we will continue to satisfy our customers’ demand for existing and new solutions in the coming years,” says Jens Strüwing, Executive Vice President Products & Technology and a member of Interroll Group Management. “As part of this growth strategy, for example, new plants were recently commissioned in the Heilbronn/Heidelberg, Germany, area and in Georgia, United States. In addition, a new plant will be opened in China next year.”

Interroll to expand Baal manufacturing site

Posted on by David Priestman

Interroll has laid the groundwork for a significant expansion of its product portfolio at its site in Baal-Hückelhoven, Germany, near Düsseldorf, by acquiring a neighbouring plot of land. The new property, which is already home to an industrial building, covers a floor area of almost 13,000 sq m. As early as 2022, Interroll will introduce a new platform for hygienic food processing and logistics from the site and consistently expand it in the coming years.

“The expansion, which will increase our production area at the site by around 40%, will be ready for operation in the third quarter of 2022,” says Hauke Tiedemann, head of the Global Center of Excellence for drum motors in Baal. “In this way, we are creating the conditions for the introduction of innovative conveyor solutions that are specifically suited for use in hygienically demanding environments, such as food processing. This enables our customers in this important area to further increase productivity while improving hygiene in their material flow.”

In recent years, Interroll has already successively invested around €20m in the Baal-Hückelhoven site. The Group’s Innovation Projects and Development Center (IPDC) and the Interroll Academy, which is responsible for internal and external training measures, are also based there. Around 240 Interroll employees now work in Baal. By 2025 at the latest, the site expansion and strengthening of expertise for customers in the food industry is expected to add around 60 jobs.

“With this investment in one of our most important sites, we are once again confirming our long-term growth course, with which we will continue to satisfy our customers’ demand for existing and new solutions in the coming years,” says Jens Strüwing, Executive Vice President Products & Technology and a member of Interroll Group Management. “As part of this growth strategy, for example, new plants were recently commissioned in the Heilbronn/Heidelberg, Germany, area and in Georgia, United States. In addition, a new plant will be opened in China next year.”

Diesel HGV ban poses EV transition challenges

Posted on by Keith McKinley

The UK Transport Secretary has announced a ban on all new diesel and petrol lorries in Britain by 2040, accelerating EV transition across logistics, transportation and supply chain.

As the single largest contributor to carbon emissions in Europe, it’s been no secret that Transport needs a sharp shake up to become a more sustainable industry; and the government’s decarbonising transport plan, complete with timelines, is the ignition we need to move toward a greener future.

Will Maden, Research Director at Miralis, a company focused on fleet electrification and optimisation agrees the timeline is good for transition: “Having a definitive deadline forces the electrification to happen, and puts pressure on manufacturers to build suitable vehicles ahead of when they may have planned to do so.”

But as with the electrification of smaller vehicles, the call for electrifying lorries and HGVs brings with it amplified challenges.  The energy needed to power a typical HGV to be able to fulfil its purpose is far greater than smaller EVs, due to the capacity, size and distance they typically cover.

Range requirements

There is a consistent view that to get further with electric, you need a bigger battery.  But the relationship is not so linear.  The weight of the battery can start to diminish what can be achieved, meaning that there will come a point when the battery becomes too large to be effective. The power given by the battery is not sufficient enough to support its own weight.

As a result, the range required of an HGV is not yet viable, so we need to find ways to charge on the go – to keep HGVs going the distance.

Researchers are exploring different ways that this can be achieved, through methods such as pantograph charging, currently utilised for the eBus market.  This method would see lorries charging on an electric infrastructure similar to tram systems – allowing them to charge on the move.  Trials are already underway in both Japan and Sweden to test feasibility.

If successful, this would allow HGVs to take smaller batteries whilst maintaining range requirements.

Cost of larger EVs

Electric lorries are yet to enter the market, but when they do they will likely enter at an elevated cost; as we saw with the introduction of electric 3.5 tonne vans, which were comparatively expensive when they first debuted.  This could see early adoption of electrification out of reach for smaller logistics firms.

Over time as manufacturers catch up with demand, the vehicles should become more affordable – but in the meantime how can organisations begin their EV journey?

The answer is an operational shift.  We can change the way logistics operates, utilising last mile delivery hubs.  Operations can run outside of city centres – with larger HGVs delivering to smaller EVs, which are readily available and affordable, to cover the final stretch.

Depot energy management

Even with on-the-go charging, logistics firms will need on-site charging solutions – and not just for their HGV fleet.  As EV roll-out gathers pace across all mobility, charging infrastructure will need to cater for multiple vehicles, with different requirements.

Staff and visitors for example may need their personal EVs charging, as well as the more complex charge needed for your main logistics vehicles.

Operations and site managers will need to consider the energy supply to their sites.  Charging multiple vehicles at the same site will put a strain on the power supply, and if not managed effectively, exceed supply limits and incur penalties. Firms will need to utilise smart charging technology to manage the load and optimise the charging of their entire fleet with intelligent energy management.

As well as ensuring the power supply is well optimised, multi vehicle charging for logistics organisations poses a further challenge: ensuring the right vehicles are optimally charged at the right time. Load balancing is a good start, but firms will need a solution to ensure their vehicles will be ready to leave the depot on time, and have enough charge to get them to their next charging facility, whether that be another depot, or a pantograph, on-the-go charging system.

Despite the challenges the industry faces with this acceleration to EV transition, the announcement from government poses great opportunity.

Michael Gibson, Managing Director at Miralis, said: “For hauliers and logistics companies there are undoubtedly substantial challenges to electrifying fleets and meeting the government’s 2040 decarbonisation target, particularly around charging and infrastructure. However, there are also substantial opportunities. In particular, the fall in operating costs will give those companies who fully embrace electrification a significant advantage over their competition.”

Whilst we wait for appropriate vehicles and charging infrastructure to be realised, logistics and supply chain firms can begin their journey to EV transition; with operational changes, such as the adoption of electric last mile vehicles, and starting to bring charging infrastructure on site for the smaller vehicles that are already coming into the depot.

Research is already incredibly active in this area, and the government’s decarbonising transport plan is only set to spark further projects. The opportunity is rife for firms to get involved in this research, and help to shape how EV transition is achieved throughout the industry, reaping both financial and holistic rewards.

Diesel HGV ban poses EV transition challenges

Posted on by David Priestman

The UK Transport Secretary has announced a ban on all new diesel and petrol lorries in Britain by 2040, accelerating EV transition across logistics, transportation and supply chain.

As the single largest contributor to carbon emissions in Europe, it’s been no secret that Transport needs a sharp shake up to become a more sustainable industry; and the government’s decarbonising transport plan, complete with timelines, is the ignition we need to move toward a greener future.

Will Maden, Research Director at Miralis, a company focused on fleet electrification and optimisation agrees the timeline is good for transition: “Having a definitive deadline forces the electrification to happen, and puts pressure on manufacturers to build suitable vehicles ahead of when they may have planned to do so.”

But as with the electrification of smaller vehicles, the call for electrifying lorries and HGVs brings with it amplified challenges.  The energy needed to power a typical HGV to be able to fulfil its purpose is far greater than smaller EVs, due to the capacity, size and distance they typically cover.

Range requirements

There is a consistent view that to get further with electric, you need a bigger battery.  But the relationship is not so linear.  The weight of the battery can start to diminish what can be achieved, meaning that there will come a point when the battery becomes too large to be effective. The power given by the battery is not sufficient enough to support its own weight.

As a result, the range required of an HGV is not yet viable, so we need to find ways to charge on the go – to keep HGVs going the distance.

Researchers are exploring different ways that this can be achieved, through methods such as pantograph charging, currently utilised for the eBus market.  This method would see lorries charging on an electric infrastructure similar to tram systems – allowing them to charge on the move.  Trials are already underway in both Japan and Sweden to test feasibility.

If successful, this would allow HGVs to take smaller batteries whilst maintaining range requirements.

Cost of larger EVs

Electric lorries are yet to enter the market, but when they do they will likely enter at an elevated cost; as we saw with the introduction of electric 3.5 tonne vans, which were comparatively expensive when they first debuted.  This could see early adoption of electrification out of reach for smaller logistics firms.

Over time as manufacturers catch up with demand, the vehicles should become more affordable – but in the meantime how can organisations begin their EV journey?

The answer is an operational shift.  We can change the way logistics operates, utilising last mile delivery hubs.  Operations can run outside of city centres – with larger HGVs delivering to smaller EVs, which are readily available and affordable, to cover the final stretch.

Depot energy management

Even with on-the-go charging, logistics firms will need on-site charging solutions – and not just for their HGV fleet.  As EV roll-out gathers pace across all mobility, charging infrastructure will need to cater for multiple vehicles, with different requirements.

Staff and visitors for example may need their personal EVs charging, as well as the more complex charge needed for your main logistics vehicles.

Operations and site managers will need to consider the energy supply to their sites.  Charging multiple vehicles at the same site will put a strain on the power supply, and if not managed effectively, exceed supply limits and incur penalties. Firms will need to utilise smart charging technology to manage the load and optimise the charging of their entire fleet with intelligent energy management.

As well as ensuring the power supply is well optimised, multi vehicle charging for logistics organisations poses a further challenge: ensuring the right vehicles are optimally charged at the right time. Load balancing is a good start, but firms will need a solution to ensure their vehicles will be ready to leave the depot on time, and have enough charge to get them to their next charging facility, whether that be another depot, or a pantograph, on-the-go charging system.

Despite the challenges the industry faces with this acceleration to EV transition, the announcement from government poses great opportunity.

Michael Gibson, Managing Director at Miralis, said: “For hauliers and logistics companies there are undoubtedly substantial challenges to electrifying fleets and meeting the government’s 2040 decarbonisation target, particularly around charging and infrastructure. However, there are also substantial opportunities. In particular, the fall in operating costs will give those companies who fully embrace electrification a significant advantage over their competition.”

Whilst we wait for appropriate vehicles and charging infrastructure to be realised, logistics and supply chain firms can begin their journey to EV transition; with operational changes, such as the adoption of electric last mile vehicles, and starting to bring charging infrastructure on site for the smaller vehicles that are already coming into the depot.

Research is already incredibly active in this area, and the government’s decarbonising transport plan is only set to spark further projects. The opportunity is rife for firms to get involved in this research, and help to shape how EV transition is achieved throughout the industry, reaping both financial and holistic rewards.

AMCO strengthens customs warehousing offering

Posted on by Keith McKinley

AMCO is expanding its customs warehousing operation and improving customer service with the deployment of the Descartes e-Customs solution.

“Following Brexit, the demand for customs warehousing is growing and operating a bonded warehouse of around 110,000 sq ft means that we are in a prime position to support trade with the EU for our customers and avoid double customs duties,” said Stuart Tooze, Head of Supply Chain, AMCO. “By choosing to deploy Descartes’ e-Customs and duty management solutions we will be able to manage vast amounts of stock, improve capabilities to process customs declarations on-site and enhance our customer service offerings.

“With the support of the Descartes team, we are integrating the e-Customs system into our existing warehouse management system. Providing the best possible service to our customers is at the heart of what we do, and we are truly benefitting from implementing one system that has everything we need, and our clients need, both now and in the future.”

With freight-forwarding, warehousing and customs at the core of business operations, AMCO provides dedicated 3PL services across a wide range of industrial and commercial sectors. In the wake of logistics challenges experienced over the past year from disruption caused by Brexit and the global pandemic, AMCO was looking to expand its customs warehousing operation and provide exceptional customer service to their clients.

As an experienced specialist in all aspects of worldwide logistics, AMCO selected Descartes’ e-Customs solution to support its global logistics operations, and benefit further from the system’s readiness for Customs Declaration Service (CDS) required for trade with Northern Ireland already built in.

“AMCO is an exemplary business for continually seeking to deliver the best experience possible to its customers,” said Pol Sweeney, VP Sales and Business Manager UK for Descartes. “Since the UK left the EU and the interest in businesses looking for freight forwarders and warehouse providers to support their operations has peaked, it has been critical for warehouse providers to offer the best possible service to their customers in order to avoid disruption.

“It has been a pleasure working with AMCO to support its operations and help develop its offering for customers in an efficient and effective way and we look forward to continuing our work together.”

AMCO strengthens customs warehousing offering

Posted on by David Priestman

AMCO is expanding its customs warehousing operation and improving customer service with the deployment of the Descartes e-Customs solution.

“Following Brexit, the demand for customs warehousing is growing and operating a bonded warehouse of around 110,000 sq ft means that we are in a prime position to support trade with the EU for our customers and avoid double customs duties,” said Stuart Tooze, Head of Supply Chain, AMCO. “By choosing to deploy Descartes’ e-Customs and duty management solutions we will be able to manage vast amounts of stock, improve capabilities to process customs declarations on-site and enhance our customer service offerings.

“With the support of the Descartes team, we are integrating the e-Customs system into our existing warehouse management system. Providing the best possible service to our customers is at the heart of what we do, and we are truly benefitting from implementing one system that has everything we need, and our clients need, both now and in the future.”

With freight-forwarding, warehousing and customs at the core of business operations, AMCO provides dedicated 3PL services across a wide range of industrial and commercial sectors. In the wake of logistics challenges experienced over the past year from disruption caused by Brexit and the global pandemic, AMCO was looking to expand its customs warehousing operation and provide exceptional customer service to their clients.

As an experienced specialist in all aspects of worldwide logistics, AMCO selected Descartes’ e-Customs solution to support its global logistics operations, and benefit further from the system’s readiness for Customs Declaration Service (CDS) required for trade with Northern Ireland already built in.

“AMCO is an exemplary business for continually seeking to deliver the best experience possible to its customers,” said Pol Sweeney, VP Sales and Business Manager UK for Descartes. “Since the UK left the EU and the interest in businesses looking for freight forwarders and warehouse providers to support their operations has peaked, it has been critical for warehouse providers to offer the best possible service to their customers in order to avoid disruption.

“It has been a pleasure working with AMCO to support its operations and help develop its offering for customers in an efficient and effective way and we look forward to continuing our work together.”

Blocked UK docks could be opportunity for manufacturers

Posted on by Keith McKinley

 

UK docks are clogged up and stock is being held up. But, asks Gary Peters, Director at The Metals Warehouse, could this be a blessing in disguise for UK manufacturers?

UK ports have faced a tough time over the past couple of years with Brexit and COVID-19 dealing almost fatal blows to the global shipping industry.

Enter 2021 and the blockage of the Suez Canal by a cargo ship that brought global trade to a standstill. The canal, which sees approximately 10% of global trade pass through, was blocked for a total of six days, holding up an estimated $9.6 billion worth of trade every day. Despite the blockage happening in March, we are still seeing a backlog of goods at UK and European ports with consumers inevitably paying the price.

With trade now beginning to flow again – albeit at a slow pace – the shipping industry is beginning to patch its wounds. But with the cost of importing to the UK, as high as it’s ever been, is there an opportunity for UK manufacturers?

Firstly let’s deal with the matter at hand. The manufacturing industry is facing delays in supplies as a result of the backlog at ports around the globe. A combination of Brexit delays, the Suez Canal blockage, and increasing global demand for shipping containers means that we’ll feel the impact of this for quite some time yet.

Back in May, 60% of British suppliers reported experiencing a number of import delays. The Brexit Trade Agreement has also left many ports and logistics firms struggling with paperwork and red tape for checks on goods entering Northern Ireland. In February, a host of executives from ports, haulage, logistics, and customs clearance firms, pleaded with UK and EU officials to delay fuller checks on goods.

We now have the case that some customs documentation being demanded to approve short, next-day deliveries by truck have been designed to manage deep-sea shipments between China, the USA, and Europe.

This has only added to the dire situation at UK docks with stock sitting on warehouse shelves and in the back of lorries. In more extreme cases, we are seeing more and more businesses refusing to ship to Northern Ireland as a result of Brexit regulations on goods.

Fallout

One key takeaway from this is that shipping container prices have, as a result, skyrocketed. We now have a situation where it’s costing in excess of $16,000 (approximately £11,500/€13,500) per cargo 40’ container, leaving many retailers and manufacturers in choppy waters.

Although this isn’t just the fault of Brexit or the backlog of ships at UK docks, but also because there is a global shortage of shipping containers which inevitably is the main culprit for the rising costs.

Nissan and Honda are just two of the automotive manufacturing giants that are impacted by the shortage, having faced delays in January due to being unable to secure materials from Asia. To put it simply, there aren’t enough cargo containers in the right places to deal with the demand, nor are new ones being built quick enough with resources continuing to be depleted.

COVID-19 and the issue at the docks have also affected The Metals Warehouse, but we also saw this as an opportunity to reflect on how we did business. For many years, the business we run prioritised turnover over profit and we thought if we didn’t take on a job, that customer wouldn’t ever come back to us. In hindsight, for us, this was the wrong mindset to have, but it’s how we have been for so long.

Over the last 12 months, though, we have said no. There are a few reasons for that. Prices have started to go up and we’re not in a position to be able to sell products as cheap as what we once did. Due to the issues at the ports, we haven’t had the depth of stock that we used to have in place and therefore we have had to be selective in who we sell to.

The last 12 months have shown us that we don’t have to undercut the market for our existence.

Opportunities

As already alluded to, container prices are rising and it’s becoming more expensive than ever to ship to the UK. However, this doesn’t need to be a bad thing for UK-based manufacturers.

The rise in prices we are talking about is making those markets further afield less competitive. In recent history, we’ve lost a lot of business overseas. For many years, China was the cheapest option for manufacturing materials and in terms of cost of production and labour, it probably still is.

But now that businesses are having to pay over $16,000 (£11,500/€13,500) to get it to the UK, this opens up a vacuum that can be filled by UK manufacturers.

In addition to the high cost, if some do decide to pay, those containers are then stuck at the docks for weeks on end and causing a huge backlog.

I honestly believe there is a huge opportunity now for UK manufacturers to show businesses that they can provide the goods and services locally. It’s up to us as manufacturers now to truly own this and begin to rebuild the nation’s trust in the manufacturing industry.

Believe it or not, but manufacturing is in the best state that we’ve ever known it and even more surprisingly so, COVID-19 has a lot to do with that.

This time last year, people were ditching their plans to go abroad and were instead investing their cash in home renovations and DIY projects. Will that happen again this year? I don’t think so. Instead, one thing that we are going to see boom during the second half of this year is tourism.

While it could be sensible to plan for a drop in consumer demand, perhaps we should also look more optimistically at the great potential of the industry as opposed to its immediate shortfalls.

If UK manufacturers can really begin to get a hold of the industry again, I’m confident we will see through this uncertain and challenging period.

 

Blocked UK docks could be opportunity for manufacturers

Posted on by David Priestman

 

UK docks are clogged up and stock is being held up. But, asks Gary Peters, Director at The Metals Warehouse, could this be a blessing in disguise for UK manufacturers?

UK ports have faced a tough time over the past couple of years with Brexit and COVID-19 dealing almost fatal blows to the global shipping industry.

Enter 2021 and the blockage of the Suez Canal by a cargo ship that brought global trade to a standstill. The canal, which sees approximately 10% of global trade pass through, was blocked for a total of six days, holding up an estimated $9.6 billion worth of trade every day. Despite the blockage happening in March, we are still seeing a backlog of goods at UK and European ports with consumers inevitably paying the price.

With trade now beginning to flow again – albeit at a slow pace – the shipping industry is beginning to patch its wounds. But with the cost of importing to the UK, as high as it’s ever been, is there an opportunity for UK manufacturers?

Firstly let’s deal with the matter at hand. The manufacturing industry is facing delays in supplies as a result of the backlog at ports around the globe. A combination of Brexit delays, the Suez Canal blockage, and increasing global demand for shipping containers means that we’ll feel the impact of this for quite some time yet.

Back in May, 60% of British suppliers reported experiencing a number of import delays. The Brexit Trade Agreement has also left many ports and logistics firms struggling with paperwork and red tape for checks on goods entering Northern Ireland. In February, a host of executives from ports, haulage, logistics, and customs clearance firms, pleaded with UK and EU officials to delay fuller checks on goods.

We now have the case that some customs documentation being demanded to approve short, next-day deliveries by truck have been designed to manage deep-sea shipments between China, the USA, and Europe.

This has only added to the dire situation at UK docks with stock sitting on warehouse shelves and in the back of lorries. In more extreme cases, we are seeing more and more businesses refusing to ship to Northern Ireland as a result of Brexit regulations on goods.

Fallout

One key takeaway from this is that shipping container prices have, as a result, skyrocketed. We now have a situation where it’s costing in excess of $16,000 (approximately £11,500/€13,500) per cargo 40’ container, leaving many retailers and manufacturers in choppy waters.

Although this isn’t just the fault of Brexit or the backlog of ships at UK docks, but also because there is a global shortage of shipping containers which inevitably is the main culprit for the rising costs.

Nissan and Honda are just two of the automotive manufacturing giants that are impacted by the shortage, having faced delays in January due to being unable to secure materials from Asia. To put it simply, there aren’t enough cargo containers in the right places to deal with the demand, nor are new ones being built quick enough with resources continuing to be depleted.

COVID-19 and the issue at the docks have also affected The Metals Warehouse, but we also saw this as an opportunity to reflect on how we did business. For many years, the business we run prioritised turnover over profit and we thought if we didn’t take on a job, that customer wouldn’t ever come back to us. In hindsight, for us, this was the wrong mindset to have, but it’s how we have been for so long.

Over the last 12 months, though, we have said no. There are a few reasons for that. Prices have started to go up and we’re not in a position to be able to sell products as cheap as what we once did. Due to the issues at the ports, we haven’t had the depth of stock that we used to have in place and therefore we have had to be selective in who we sell to.

The last 12 months have shown us that we don’t have to undercut the market for our existence.

Opportunities

As already alluded to, container prices are rising and it’s becoming more expensive than ever to ship to the UK. However, this doesn’t need to be a bad thing for UK-based manufacturers.

The rise in prices we are talking about is making those markets further afield less competitive. In recent history, we’ve lost a lot of business overseas. For many years, China was the cheapest option for manufacturing materials and in terms of cost of production and labour, it probably still is.

But now that businesses are having to pay over $16,000 (£11,500/€13,500) to get it to the UK, this opens up a vacuum that can be filled by UK manufacturers.

In addition to the high cost, if some do decide to pay, those containers are then stuck at the docks for weeks on end and causing a huge backlog.

I honestly believe there is a huge opportunity now for UK manufacturers to show businesses that they can provide the goods and services locally. It’s up to us as manufacturers now to truly own this and begin to rebuild the nation’s trust in the manufacturing industry.

Believe it or not, but manufacturing is in the best state that we’ve ever known it and even more surprisingly so, COVID-19 has a lot to do with that.

This time last year, people were ditching their plans to go abroad and were instead investing their cash in home renovations and DIY projects. Will that happen again this year? I don’t think so. Instead, one thing that we are going to see boom during the second half of this year is tourism.

While it could be sensible to plan for a drop in consumer demand, perhaps we should also look more optimistically at the great potential of the industry as opposed to its immediate shortfalls.

If UK manufacturers can really begin to get a hold of the industry again, I’m confident we will see through this uncertain and challenging period.

 

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