Wednesday, January 13 2021
First of all, I would like to wish you and your families a prosperous and healthy 2021. Hopefully the new year will be better for all of us!
I know 2020 has been anything but easy for you. The past year brought new challenges no one was prepared for, changing how we do business like never before. I have respect for how you’ve handled the situation, coming up with creative solutions to stay in business.
Unfortunately, our industry has also been affected by the consequences of the pandemic. In this message, I would like to explain more about the current situation of the market. A rapidly changing situation that has a profound effect on everyone in the industry and us as an wholesaler and production company.
Unavoidable price increases
Since late November we have to deal with exceptionally high transport prices from China. This increase was caused by the COVID-19 situation and the approaching Chinese New Year. That means there is now a large demand for containers and container spaces on ships, but at the same time there is a very limited supply. As a result, ship owners have significantly increased their prices. Currently we are paying no less than 7 times as much as usual and this is expected to increase to 10 times as high as before.
But unfortunately, transportation costs are not the only costs that have increased tremendously. Also raw material and packaging have gotten more expensive due to increased demand.
So far we have handled these extra surcharges. However, the surcharge on the container price is currently that high that we can no longer fully cover these extra costs ourselves. Unfortunally, this means we will have to raise our product prices for you. We have tried to postpone this measure as long as possible but we’ve now reached the limits.
Furthermore, our aim is to harmonise package prices by applying a single package price. Previously, this price depended on the stock location the order was shipped from. In order to offer more transparency, our parcel prices change too. Our new prices are effective from February 15th 2021.
We do our best to limit the effect of our price increase on you as much as possible. Among other things, we have taken a number of measures including moving the production of a number of high runners to our own production facility in Přestanov, Czech Republic. Also, we have brought forward as many container shipments as possible in order to avoid higher costs and the risk of delays.
Currently we are working on a lot of calculations, finalising our new prices. As this increase will affect you as our valued customer, we found it important to already inform you about this upcoming change, even though we do not have our new prices ready yet. It is expected we will be able to update you on this in the week of January 18 the latest.
If you already have questions regarding this update, please feel free to reach out to your personal contact person.
Last but not least: take care of yourself and your families.
President of Showdown Displays Europe