Q1 2022 Review

The Year So Far: 2022 Q1 Review

War. What is it good for? Exacerbating and sustaining already existing challenges in a post-pandemic world.

At the risk of sounding repetitive, it’s been an extremely challenging two years. Even as the world seems to be moving on from the coronavirus pandemic, the conflict in Europe has only prolonged some of the issues faced and in fact created new ones. It would appear we are out of the frying pan but have jumped straight back into the fire.

With the first quarter of 2022 now at its end, we wanted to share our key takeaways from the past three months and offer our insight into how the remaining nine months may play out.

Part I | Like A Broken Record: Shipping Challenges

In line with our predictions from previous communications, the problem with shipping remains. The key issue of securing space on vessels has eased but with extended shipping times and the delay of vessels arriving into the port, trying to plan the appropriate level of stock remains very challenging. ?In order to address the ever-extending delivery times, investments in additional stock depth is required to avoid out of stock situations. The knock-on effect of this investment is that the scale of incoming stocks to our distribution centre has been extraordinary, and truly pushed our warehousing & logistics teams to their operational limits.

Further compounding this issue is the 7 calendar days free rent/demurrage per container. Whilst this may sound a lengthy time period, when factoring in reduced staff levels at port and in-house due to coronavirus, as well as time lost outside the typical working week, these days slip by incredibly quickly.

We have ourselves had to push multiple deliveries back due to a lack of capacity and throughout Q1, Metpro has absorbed substantial charges to keep our operations running as efficiently as our customers expect.

Part II | Broken Links: The Supply Chain

The fallout from the pandemic continues to impact the wider supply chain with several contributing factors, most notably of these being port closures, factory closures, port congestion, and the more recent driver shortage.

Although in the UK and other European countries legislative coronavirus measures have been scrapped in favour of national guidance, the pandemic remains an incredibly sensitive topic elsewhere in the world, particularly the Far East. An example of this came in mid-March as we were forced to temporarily close one of our key manufacturing facilities due to a covid outbreak. Fortunately, with a robust supply chain in place, the impact to Metpro on this occasion was extremely limited. However, it’s situations like this which remind us that, whilst we can once again socialise in pubs with family and friends, coronavirus remains virulent and we cannot afford at any time to become too relaxed with our operations.

Part III | Oil & Oligarchs: The Conflict in Europe

It should come as no surprise to learn that the current conflict in Europe has caused additional challenges for both our industry and personal lives.

Whilst the true impacts of this situation are yet to be fully realised, the earliest implications have been on the availability of raw materials. As to be expected with any shortages of this kind, the costs have gone up resulting in March being one of the most volatile periods for raw material we have experienced as a business. A bi-product of material scarcity also means we will likely see an increase of shipments on the Asia to Europe freight routes – I would refer you here back to Part I.

In recent weeks, we have also seen the introduction of emergency fuel surcharges on sea vessels as the price of crude oil reached an eight-year high. At Metpro, we aim to absorb cost increases wherever we can however, with offshore & overseas carriage prices once more reaching record levels, this will inevitably lead to future price increases.

Another aspect showing signs of impact is the construction projects themselves. With the UK Government introducing new sanctions on individuals and businesses with Russian interests, progress on some new buildings is slowing down. Dependent on what happens over the coming weeks & months, there may be knock-on effects working their way back through the supply chain, and this is certainly something to be mindful of as the dispute evolves.

Part IV | Lint in a Washing Machine: Our Thoughts on the Next 3-9 Months

At this stage, summing up each individual point raised in this article would be impractical. Our opinion at Metpro, informed by regular conversations with our customers, logistics partners and manufacturing facilities, is that we can expect the trend of existing challenges to fluctuate and new challenges to pop-up without much warning.

I realise that this sounds a rather grim outlook but it’s not necessarily an opinion to see as negative. When you consider what we as an industry, as a country and indeed as a global society have weathered these past two years, the evolution of new challenges isn’t actually that scary a thought to consider. At least if we don’t allow it to be.

Ultimately, whilst we cannot predict anything with surety, we can almost bank on more of the same as the rest of the year unfolds.

Part V | Keep Calm & Maintain Stock: How Metpro are Prepared

In the spirit of more of the same, our activity at Metpro is unwavering and remains focused on servicing our customers. With all our departments working with this goal in mind, our intention is to ensure our stock levels are always healthy and our product quality never drops.

I hope once again that the information presented here has been insightful and interesting. I would welcome your thoughts on the year so far and what you and your business have experienced. Please feel free to share your feedback in the comments section below.

If you would like to find out more about our operation or to discuss how we can help your business, please feel free to contact me directly or alternatively, contact our team on 0121 552 2100 or by email at [email protected].

You can also visit metpro.co.uk to check real-time stock levels 24/7 as well as download any technical information you require.

Metpro Group | Quality, value & innovation, in all that we do.