In January 2021 we implemented a Temporary Surcharge across many of our product ranges as a direct result of the major disruptions to global shipping and the significant increase in logistics costs.MORE INFO
As you may be aware, the Global sea freight price increases continue to rise. When we calculated the surcharge rate earlier in the year the sea freight portion of containers was at $12,500. That has now significantly increased on a sustained basis and we can no longer absorb the increase into our cost structure. The market intelligence we have indicates that we will not see an improvement in this rate through 2021 and indeed the expectations are that this may rise as we enter peak season driven by Christmas demand and into 2022 due to Chinese New Year.
Our intention is to continue to maintain inventory levels despite the rate hike and as a result we need to raise the surcharge level to cover the increase. We will be issuing a revised surcharge price list by SKU which will take effect from 1st September 2021.
In addition to the freight surcharge for our imported products we have been facing significant material cost price increases against our UK manufactured products and our European sourced ranges. Steel prices have increased on average by 57%, Aluminium by 50%, PVC by 62%, Polypropylene by 130% and TDI (used in the manufacture of foam products) by 42% over the course of the year. The increases are driven by post COVID demand rises across the globe.
As the situation is so volatile, rather than pass on a permanent price increase we have taken the decision to apply a blanket surcharge to all UK and European sourced products and we will monitor the situation over the coming months. Again, the surcharge will be applied at a SKU level and will be incorporated within the full surcharge list mentioned above. If the situation should improve, we will reduce or remove the surcharge in the future.
We appreciate the difficulty that these increases create for our customers particularly where there are contractual restrictions in place but unfortunately in order to maintain supply, we have no choice but to pass these on.
As a business we will honour all current back orders that are due for immediate delivery at the price at which the order was accepted. However where forward orders are placed your sales contact will be in touch in due course to discuss the re-raising of the orders at the new pricing levels.
We value the business you place with us, and we appreciate your support and bearing with us during these challenging times.