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BHETA updates on freight campaign

With the cost of a 40 foot container from East Asia to Europe now ten times higher than before the pandemic (according to freight tracker Freightos), BHETA continues to spearhead a campaign to secure intervention from the Competition & Markets Authority (CMA). Shipping consultancy Drewry predicts that profits for the current year in the freight industry will equate to the total of the last twenty years.

Early responses received from CMA suggest that it is now actively looking at the issue, along with government ministers and MPs that have been approached so far.  The campaign followed a BHETA member survey which confirmed the levels to which housewares and small domestic electricals suppliers are being impacted by increased freight costs when importing products, components, or raw materials.

Above: Andrea Coscelli, chief executive of the CMA.
Above: Andrea Coscelli, chief executive of the CMA.

In correspondence from the end of September, Andrea Coscelli, chief executive of the CMA acknowledged the impact of the freight cost hikes on the UK economy and said that the organisation had been monitoring the situation for some time.  The CMA is also in ongoing discussions with the Department for International Trade, the Department for Transport, the European Commission and the World Shipping Council as it considers the best approach going forward.  The current view is that continued talks are likely to be more fruitful than a market investigation into the possible existence of cartel-like behaviour and other restrictive practices, although formal investigative work has not been ruled out.

“To date, BHETA has contacted the business secretary Kwasi Kwarteng as well as the CMA, supported members in contacting their own local MPs and featured members’ views in an article in the Daily Telegraph,” reports Will Jones, ceo of BHETA. “Clearly this co-ordinated approach is bearing fruit and we are urging all members and colleagues to maintain contact with their elected representatives on this subject, using the BHETA templates.  Obviously, if we do come across any evidence of collusion between freight providers, we will be taking this directly to the CMA.”

Emphasising the need for housewares members to participate in BHETA’s campaign, Will acknowledges: “As the CMA says, this situation is the result of a combination of challenging circumstances, some to do with the pandemic and some perhaps not so much, but in many cases, with freight costs now exceeding the value of goods being shipped, it is clearly an untenable position.

“Suppliers will only be able to absorb a certain percentage of the increased costs, which in turn will lead to higher costs for the end consumer.  Smaller suppliers may not be as successful in passing increases onto the trade and this will result in the supplier base reducing or consolidating, which will impact on competition, employment and ultimately the whole economy.  We are already seeing significant gaps on shelves, company closures and inflationary pressures.  With reduced profits, there is reduced corporation tax, leading to a real shock to national economic wellbeing as well as to individual consumers, making this an issue of concern to everyone.”

Meanwhile, Bryony Dyer, Dexam’s md urges fellow housewares industry leaders to communicate with their local MPs regarding the freight crisis, stating: “Dexam wrote to Gillian Keenan, our local MP, using the BHETA template and I was pleased with both the response from both our MP and the letter from the CMA.”

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