INDUSTRY ROUNDTABLE
THE FREIGHT DEBATE
PPS invites four senior executives from across the toy, nursery and apparel and accessories categories - André Delore, general manager, Infantino Europe; Anne Davies, owner, Room to Grow; Sam Ireland, operations director, Bigjigs Toys; and Emily Harrison, sales manager, Drew Pearson International – to discuss the current issues with the cost of freight and the effect this will have on pricing, lead times and the potential impact on Christmas.
André Delore
Anne Davies
Sam Ireland
Emily Harrison
Emily: “The biggest impact so far is the sheer cost of it - orders negotiated with customers and costed months ago with reasonable freight rates are now suffering with the impact of costs being four or five times what they were a year ago. There is no room to go back to customers now to renegotiate on the costs. We are working with it in the hope that the situation improves as we move through Christmas on into 2022, but prices to customers and ultimately consumers will inevitably rise.”
HOW IS THE CURRENT SHIPPING SITUATION IMPACTING ON YOUR BUSINESS? André: “Well, it is safe to say that 2021 has been the year of logistics and supply chain, throwing multiple challenges at us including higher logistic costs and longer production. Shipping lead times are also impacting the business overall in terms of margin and our out of stock position is increasing significantly.” Anne: “We have definitely been experiencing delays on our container stock. We’re finding that a lot of goods are left sitting in ports waiting to be collected and omitted from the vessel. This is happening frequently with products we have already sold and it can be very frustrating for customers who are waiting on orders, as well as costly for us as a company trying to appease them.
ARE YOU PASSING ANY OF THE EXTRA COSTS YOU ARE INCURRING ON TO YOUR CUSTOMERS? André: “We are working hard to ensure the cost is not directly passed to the customers, which in turn will help maintain the optimum retail price for end consumers. We are trying to achieve this by speeding up the development of our eco-friendly packaging using less materials and more compact packaging method resulting in significant impact on cost reduction.”
The inflated shipping costs are making it prohibitive to work with certain factories and we are having to look elsewhere to source our products. This raises major challenges within itself as European factories are already over capacity and many are not looking to take on new customers.” Sam: “It's been a challenge, that's for sure. We have certainly seen more items out of stock this year than ever before mainly caused by delays in shipping that we are all facing, but also due to higher levels of demand.”
Anne: “As of yet, we have not passed any of the additional costs onto consumers, but unfortunately it is inevitable that we will have to visit this idea if the shipping costs continue to remain at such a high
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07/09/2021 11:05
