Red Sea Attacks: Shipping Updates

Shipping lines which bring the containers from the Far East to Europe have decided that it is not safe to send their ships via the short Red Sea route following attacks on vessels.  A prolonged campaign targeting commercial vessels could disrupt the global economy by delaying deliveries of goods, fuel and food, and pushing up prices.

_28/02/2024

It is difficult to know if we are seeing the lull before the storm with the Red sea attacks or just the new normal. On the surface, a delay of 2 weeks for each container from the Far East is not a major problem in the overall scheme of things.

For the future however, we fear that there will be a lot of knock on effects as there is the need for a lot more ships and containers to allow for the longer transit times - up from 8 week round trips to 12 weeks. There was certainly some excess capacity in the system towards the end of 2023 and it might be that this is just enough to buffer out the situation and turn it into a non-event.

At the moment, we are seeing freight rates dropping a little as the situation is normalised. The Chinese shipping lines are not being attacked by the Houthi rebels and are using the Suez. Unfortunately, everyone would like to be on those "faster" ships and the prices are at a premium. How the world works in mysterious ways.

• The prices for many products that you buy from Gompels are determined by - USD to GBP exchange rate
• Shipping costs from the near and Far East (all usually through the Suez)
• Energy prices (Oil and Gas or plastic production)
• Any unusual demand factors like the Covid crisis and its hangover effects
• And to a limited extent the price of pulp for making tissue and paper

Most of the time, we can keep prices quite stable as it is relatively rare for all 4 factors to move in the same direction. It does however feel that we are close to being in a perfect storm with a weak GB pound, high shipping costs and relatively high Energy prices. The world has got used to Oil being at $70-80 per barrel, but it certainly is not where it was at $30-40 per barrel and an exchange rate of 1.6 USD to the GBP.

Keeping everything in stock is proving to be more difficult than usual as supply chains are stretched and the cracks begin to appear. On the whole, the vast majority of our products are in stock, although we have 2-3 weeks less than we normally would on some lines as a result of the recent shipping delays. Where possible we will seek good alternatives when we run out of stock.

In other news

There are many changes happening on the website as we strive to make it a really easy and fast site to use.

Buy Again has had an update to include your Last Bought Quantity, with a handy button to quick-add that quantity to your basket. Hopefully this will save you a few clicks for each product and make it even quicker than before.

Once you're logged in, you will be directed to a new page full data that is relevant to you, to which we have called Browse. You can quickly see your latest order and tell us about any issues, or download your Safety Datasheets for any looming inspections. We've also included a carousel of products that we think you might be interested in browsing, hence the name!

If you forget your password, you can now Sin In By E-mail on your phone or computer. It saves so much frustration and wasted time.

Just in

We have a range of Gompels Polycarbonate crockery as an alternative to Melamine, it' great because it can go in the Microwave. There are also new baby feeding bibs and drinking cups to save you money on Tommee Tippee products.

Our Buyers are visiting 6 countries in March to meet our manufacturers and smooth out any bumps in supply. We aim to be the supplier of choice with really good factories providing us with quality products. It all begins with great relationships that we strive to build so that we bring together manufacturers and customers.

On our Free Resources page we have lots of guides, posters and other useful things that you can print out and use. All for free because we hate the thought of you reinventing the wheel or being charged for things that everyone needs. There is also a wealth of free training resources online at gompels.co.uk/gompels-free-online-courses-videos.html#home. You can get free COSHH training, the care certificate training and answers as well as how to get the most out of our amazing online tools that are great for groups looking to manage multiple sites.

_03/01/2024

Our forwarders have advised that the current diversion in place will add further 2-3 weeks to the delivery time and a considerable amount of additional costs. It's no surprise that prices for shipping a container have risen 400% since mid December. This in itself would not be too much of a problem except that it comes at the worst possible time, Chinese New Year. Space on the ships is always tight as everyone tries to get stock out before the 2-4 week Chinese holiday. This combined with a round trip to Europe extending from 8 weeks to 12 weeks means that there is going to be 30% less space available and the journey is going to take 50% longer.

The effects will not show in the market in terms of stock availability until around the end of February. At this time of year we typically get some storms, particularly on the longer South Africa route. This could make the situation even more pronounced because it slows down the ships and can force them to take refuge in a sheltered place like the Mediterranean sea.

As things stand our stocks are good, and we expect to be able to ride out the situation for our customers. We do however not have enough stock to support a deluge of new customers who cannot get supplies from their usual distributors. So in the event of the situation getting any worse, we will close the website to new customers just like we did during the COVID peaks. Stocks will be for our regular, loyal customers and do our utmost to keep you fully supplied.

We see ourselves as your procurement department and will do our very best to keep key lines in stock or have a good alternative available. Sometimes we will have to pay a slightly higher price for the stock, but we consider that worth paying in order to make sure that we have it available for you. As always, we will then do our best to get the price back down to a pre-crisis level as soon as possible. In 2023 we dropped 1500+ prices for all customers without you having to ask.

We will continue to monitor the situation in the Red Sea and provide updates when required.

Sam Gompels
MD