‘Exceptionally challenging’: how rising shipping costs hit UK firms
The low point for Matt Gammell, co-founder of Pickering’s Gin, came last spring when he got down to his last pallet of glass bottles.
A longstanding order with a European glass maker was cancelled at short notice, and the Edinburgh-based spirit maker feared it might have to stop production.
After ringing around many different suppliers, Gammell managed to find enough bottles. He bought up the lot, exhausting most of the company’s dwindling cash reserves in the process.
“It’s your brand DNA, it’s in a specific bottle, the label is designed to fit. You can’t just grab another bottle, it’s not how it works,” Gammell said. “It was exceptionally challenging.”
Pickering’s Gin imports some of the glass bottles in which it sells some of its gins from China, and has suffered during Covid, paying elevated costs and dealing with unreliable shipments. Shipments from China that used to take on average 36 days have sometimes taken almost double that to arrive.
The travails of Pickering’s Gin exemplify the difficulties faced by many smaller companies struggling to keep trading during Covid, buffeted by headwinds including product shortages, supply chain disruption, rising costs and lockdowns.
And their struggles have shone a light on one critical link in supply chains that was at times stretched to breaking point: the shipping industry. Despite recent falls in cargo shipping prices, the world’s largest shipping companies have been reporting extraordinary rises in annual profits in recent months. Logistics analysts are forecasting that average shipping costs could reach levels never seen before, while disruption to international shipping will continue.
For Pickering’s Gin, the price of bringing a shipping container from China soared from
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