For tyre distributors in import-heavy markets such as the UK, the sharp and sustained rise in the cost of shipping product from key sources such as China and South-East Asia is a major headache with potential market-reshaping consequences. While there have been varying levels of success in managing this headwind according to some in the market with whom Tyres & Accessories has spoken, strategically placed orders and bumper levels of stockholding can only ameliorate prices on such products for so long. Wholesalers have faced a difficult trading environment this year, which to this point has shown little sign of abating.
After hiatus last year, the NTDA’s Tyre Industry Awards will be back in 2021, according to the association’s chief executive Stefan Hay.
The Awards are scheduled to be presented to the winners at a ceremony sponsored by Sailun at the NTDA Annual Dinner, which is due to take place on the evening of Thursday 7 October 2021 at the ICC Birmingham, following the daytime Tyre Industry Conference sponsored by GB Tyres Ltd in association with Linglong Tire.
Back in April, Tyres & Accessories spoke to leading supplier of freight forwarding services to the UK tyre sector, Maritime Cargo Services about the perfect storm of circumstances complicating life for tyre importers. Then it was difficult to anticipate the logistical problems the industry would face by the end of the first quarter – at least far enough ahead to sidestep the issues entirely. Even armed with the expectation of disruption, the pressure has built at British ports throughout the year, especially in the last quarter as Covid began to spike again. As a result, Honda UK’s suspension of production became a high-profile symptom of the catalogue of issues causing bottlenecking and ultimately delays in the supply chain. With the end of the Brexit transition coming amidst the second spike of Covid-19 transmissions on 31 December, T&A asked MCS again about what difficulties distribution businesses need to plan for this winter.
Chinese celebrations of Lunar New Year (25 January) were muted this year by the emerging coronavirus crisis, with the huge amount of personal travel associated with the holiday period down around 45 per cent. Yet global business’s reliance on China’s manufacturing meant that large orders were, as usual, preplanned to take into account the two to three weeks of manufacturing slowdown at this time of year. In the UK tyre sector, the result is that a large number of tyres that will likely exceed some distributors’ warehousing capacity are now arriving at UK ports. Freight forwarder, Maritime Cargo Services is offering one solution to companies experiencing this problem.
Shipping plays a vital part in the world of tyre wholesaling. Managing the volatility of freight rates with efficient and transparent service is paramount in maintaining the competitiveness of distribution operations. Maritime Cargo Services, a freight forwarder with significant ties to the UK tyre industry, tells Tyres & Accessoires about the factors affecting the global shipping industry, and how its fluctuations, illustrated by this chart, which shows at a glance the trends of the last 12 months, must be managed effectively to allow tyre wholesalers to operate efficiently.
The Reverend Richard Coles will be the closing speaker at the NTDA’s 2019 Tyre Industry Conference (3 October, International Convention Centre (ICC), Birmingham). The broadcaster, writer and Church of England priest is known for a variety of television appearances, including Have I Got News For You, and a memorable run on Strictly Come Dancing. He first found fame as one half of the 1980s band, The Communards, which enjoyed three UK Top 10 hits, including the biggest-selling single of 1986, Don’t Leave Me This Way.
Considering the increasing price of oil and continuing consolidation in the freight shipping, the slight decrease in freight rates, as shown on the graph, may come as a surprise. Maritime Cargo Services, a key freight forwarding agent in the UK tyre import business, explains…
As August came to its close, the world’s seventh largest – and South Korea’s biggest – container shipping line, Hanjin Shipping, filed for court receivership, consumed by mounting debt schedules with creditors and increasing industry overcapacity. Hanjin had suffered annual net losses from 2011-2014 – with total debt in June reaching a staggering $5.5billion. While there may be hope on the horizon, (Hyundai Merchant Marine are in talks to acquire Hanjin’s vessels and staff), for the time being, ports in China and the US have denied entry to Hanjin ships and goods cannot be unloaded. Discussions between banks and Hanjin are yet to proffer a solution, though it seems likely that its Asia-United States route and related sales and marketing assets could be on sale by the end of the week in order to raise rehabilitation funds, several news sources have reported.
The Tyre Industry Awards have been presented for 2016 during the sold-out NTDA Annual Dinner, this year hosted by the Vox Conference Centre on the site of Birmingham’s National Exhibition Centre. In addition to the various gongs, the NTDA presented Sir Tom Farmer with the National Chairman’s Award for Outstanding Contribution to the Tyre Industry, sponsored by Hankook UK, while Brian Funnell and Lennie Wells were also made NTDA Honorary Life Members. Presented by television personality Suzi Perry, the winners were decided by a panel of leading industry judges, and the results live-tweeted by Tyrepress via its Twitter feed.
Asia-Europe container transportation rates are currently at a deep low (see graph), but the obvious price benefit to importers of tyres from South-East Asia is mitigated somewhat by volatility in shipping conditions, which affects punctuality and reliability of tyres’ delivery. Shipping lines’ over-estimation of the market potential has led to artificial capacity restrictions used to mitigate over-capacity, and in some cases, cancelled shippings. With these factors fundamental to UK tyre wholesale, Tyres & Accessories asked freight forwarder Maritime Cargo Services partner Rob Shelley about the issues currently at play in this market.
The winners of the 2015 Tyre Industry Awards were announced during the 86th NTDA Annual Dinner on 1 October following the new one-day Tyre Industry Conference at the International Convention Centre (ICC), Birmingham. Attendance at the dinner set a new record, with 60 tables sold out. The speaker and presenter of the awards was former England Rugby Union international, amateur dancer and current television pundit, Austin Healey, who added some trademark irreverence to proceedings. The Awards were also live-tweeted as they were announced on the @Tyrepress Twitter feed. The awards were sponsored this year by Sailun Tyres.
Increases in freight rates during the last quarter of the year happened earlier than expected, according to Maritime Cargo Services’ Rob Shelley. The freight forwarding company said that the market, led by supply and demand, had seen rates harden due to increased demand for shipping space “earlier than expected”. This ahead of schedule peak season combined with “higher than forecast import volumes” to increase both rates – “in some cases by 150 per cent” – and dockside waiting times.
Freight forwarding company, Maritime Cargo Services has made the point that while shipping costs have remained relatively stable in 2014, the past seven years have been marked by volatility. Freight forwarding specialist, Rob Shelley explains: “2008 saw the end of the Asia-Europe box cartel known as the Far Eastern Freight Conference. The FEFC was banned by the EU as it thought it anti-competitive. Its departure came as Asia Europe suffers historically low freight rates. It took with it stability with all the shipping lines in communication with one another.
Freight forwarding company Maritime Cargo Services has recently been made an Authorised Economic Operator (AEO) in the UK by the European Union. The AEO certificate is an internationally recognised quality mark indicating the security of a company’s role in the international supply chain, with “efficient and compliant” customs controls and procedures.
Sea freight rates are currently on a downward trend that looks likely to continue for the foreseeable future, says freight forwarding specialist Rob Shelley of Maritime Cargo Services. According to industry feedback, this year’s peak season from Asia to Northern Europe got off to a slow start in July, and remained unconvincing even up to the beginning of September. Exports from Asia to Northern Europe in the second quarter were only the same as during the same period last year, and year-on-year growth in the first seven months of 2013 reached just one per cent.