Manufacturers and industry suppliers are keeping an anxious eye on developments in the Middle East as the diversion of shipping from the Suez Canal is increasing costs and introducing delays for equipment and consumables.
Just before the Christmas break, officials from the BEIS asked print industry bodies what the likely impact of a prolonged closure of the main trade route from the Far East to Europe might be. The blockage of the canal three years ago came during the pandemic when economic activity was subdued, so the impact was limited. Nevertheless shipping costs rose sharply, from less than $4,000 per container to almost $8,000.
Freight costs has already more than doubled, to reach $3,100 for a 40ft container compared to £1,400 earlier last year says the Financial Times. The longer journey around southern Africa adds around 14 days to a journey, limiting the number of round trips a container vessel might make in a year, putting further pressure on the availability of shipping containers.
The impact on UK print is currently limited. Some equipment from China, Korea or Japan, will be delayed, which may lead to accounting issues for suppliers as sales will be booked that much later and possibly into a different financial period.
In the longer term the supply of consumables produced in the far east may be disrupted. This includes printing plates, toners and inkjet inks. Fortunately demand in the post Christmas period is in its regular dip providing time for suppliers to make alternative arrangements.
The approach from government came in the days before the seasonal break, giving little opportunity for feedback. Bettine Pellant, chief executive of Picon, says “We were contacted along with the IPIA, BPIF and the Confederation of Paper Industries. They wanted to know that if the Suez Canal were closed for an extended period, would this have an effect on our industry? The CPI was able to say No, while we and others have canvassed our members to provide quick feedback.”
The UK government has warned Houthi militias that have been attacking shipping in the Red Sea that continued action will result in retaliatory action.
