The majority of Sports flooring such as jigsaw foam mats is manufactured in Asia and shipped through the most economical route via the Suez canal to the UK.
The conflict in the Red Sea or any significant geopolitical tension in key maritime regions can have a broad impact on global trade, including the price and availability of various goods, such as jigsaw mats and sports flooring. The effects can be attributed to several factors related to the nature of international shipping and the global supply chain. Here’s how such conflicts might impact the price and availability of jigsaw mats and sports flooring:
DISRUPTION IN SHIPPING ROUTES
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Increased Costs: The Red Sea is a critical passageway for maritime trade, including the Suez Canal, which is one of the world’s most important shipping lanes. Conflict in this region can lead to disruptions or closures of these routes, forcing shipping companies to take longer, alternative routes. This can significantly increase shipping times and costs due to the added fuel consumption and possibly higher insurance premiums for ships traveling through or around conflict zones.
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Impact on Price: The increased transportation costs can lead to higher prices for consumers. Suppliers and manufacturers may pass these additional costs onto customers, affecting the retail price of jigsaw mats and sports flooring.
SUPPLY CHAIN DELAYS
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Delayed Deliveries: Conflicts can cause delays in the supply chain, affecting the timely delivery of raw materials needed to manufacture jigsaw mats and sports flooring. This can lead to production delays and shortages of finished products in the market.
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Availability Issues: If the conflict prolongs, it may lead to a scarcity of sports flooring materials in some regions, affecting the availability of these products for consumers and businesses.
INCREASED DEMAND FOR ALTERNATIVE ROUTES
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Congestion and Further Delays: As shipping companies look for alternative routes to avoid conflict areas, there could be increased congestion in these alternative passages. This could further delay shipments and increase costs, exacerbating the issues of price and availability.
MARKET UNCERTAINTY
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Price Volatility: Conflicts can lead to market uncertainty, causing fluctuations in the prices of raw materials and finished goods. For products like jigsaw mats and sports flooring, this could mean unpredictable pricing over time.
STRATEGIC STOCKPILING
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Short-term Availability: In anticipation of potential supply chain disruptions, some retailers or distributors might stockpile goods, including sports flooring. While this could temporarily ensure availability, it might also lead to shortages down the line if the conflict continues and replenishment becomes challenging.
It’s important to note that the degree to which the conflict in the Red Sea or similar areas affects the sports flooring market can vary based on the duration of the conflict, the resilience of the supply chain, and the availability of alternative sources and routes for materials and products. Businesses involved in the production and distribution of jigsaw mats and sports flooring might seek to mitigate these risks through diversification of supply chains, strategic stockpiling, and exploring more localized manufacturing options.
SUMMARY.
The tensions in the Red sea has seen the freight costs increase from $1243 to over $5000, up to date costs can be seen at Freightos. Given the increase in insurance and tolls following the conflict associated with the route through the Suez canal it seems increasingly unlikely we will see a return to the freight rates of November 2023 any time soon. Therefore passage via the Cape of Good hope is seen as a more viable option. This route however takes approx. 7-10 days longer and a great deal more fuel costs. Delays contribute to supply demand equation as does increased costs. Once the system as a whole has had time to recalibrate especially once Chinese New Year has passed on the 18th Feb we are hoping for some softening of prices. Fingers crossed.
