Monday 30th August 2021
Message from Managing Director
With the Challenges and opportunities presented to all our businesses this year, we felt it was a good idea to increase our communication with all our customers.
Below gives you a flavour of some of the issues we are working against. It is essentially a snapshot relevant to today’s information.
We are unsure if issues will ease as the year goes on or whether they will get worse and intensify.
In relation to soaring cost, we do not know if they have peaked or whether they are yet to peak.
Global shipping crisis
At present there is a massive shipping crisis with a few very real and very costly challenges.
- The repatriation of containers to China and far east is not happening fast enough, creating loading issue and increasing handling fees and loading lead times.
- The majority of ships are travelling far below full capacity due to the complexities of timing mother vessels and feeder vessel to meet all whilst dealing with massive port congestion.
- Cost of Shipping has increased about 300% in the last 3 months.
- We have ordered heavily in the last few months to have a lot of our shipping space prepaid at agreed rates meaning we haven’t born the brunt fully compared to what some companies will have to.
- The entire process as many of you will know by now has been shambolic to say the least.
- We have invested significantly in additional stock to safeguard against this so we should have good availability. There are still a major number of UK retailers who will not sell into Ireland until further clarity is obtained. There are several couriers including DPD who have stopped all deliveries to Ireland pending further clarity.
International lead times have increased about 15% with UK lead times increasing on average 400%.
Sales order lead times.
We would expect that within two to three weeks we would be back to normal service, this will just afford us the chance to clear a back log of orders.
We have added additional staff members to cope with the increase in business.
We have already been notified of price increases from at least 10 suppliers, but we have chosen not to act on these as everyone is trying to find their feet with the current pandemic.
The reality is we will need to address these around March.
But please be aware that we are still working hard and have plenty of alternatives. Most tools we carry in several brands so there are always alternative options.
Below is an example.
A Laser spanner, in addition to their January price increase, will now carry an additional 2.7% duty which BNR have to pay. Laser notified us in September last year of a price increase effective from the 1st
of January. They have now notified us that this will not cover the increase in their costs and they have a further increase in April. Our minimum order value with them has tripled.
The reality is that a standard Laser spanner will probably no longer be competitively saleable for you or I in 2021. We will continue to use Laser for specialised tooling.
However, there is one exception, Laser Tools have increased their prices considerably and we will be implementing this immediately. Over the past number of years, BNR have been able to offset all of Laser Tools’ price increases due to weakening of Sterling, and not passed any on to our customers. Unfortunately, with the latest increase and additions in cost (Duty etc.) we have no choice but to increase our pricing.
We always have alternatives:
Normex prices have remained unchanged and we have agreed with Toptul no price increase with Toptul for 2021, so we are currently using the strong dollar exchange rate to offset the high shipping costs and can guarantee no price increases in the 1st
half of this year and hopefully none at all.
All in all, what we are saying is stay in touch and we will continue to work through this together.