Price change
How Freight Costs are driving up Prices
As you know, at ABS we are always committed to delivering the best value and service to our partners. Like many others, we were also hoping for more stable market conditions in 2024, but unfortunately, this is still not the case.
The ongoing war between Russia and Ukraine, as well as the global energy crisis, have placed significant upward pressure on costs across multiple sectors. Transport and freight costs in Asia remain our biggest challenge, and unfortunately, we have little control over them.
Since May 2024, these costs have been rising steadily. In July 2024, the SCFI (Shanghai Containerized Freight Index) reached 5,000 USD, representing a 400% increase compared to container prices at the beginning of the year. In addition to the overall demand and supply imbalance driving up prices, instability in the Middle East is affecting the Suez Canal, forcing vessels to take longer and more expensive detours around Africa for safety reasons.
Rising energy costs
Rising energy costs are worsening the situation, pushing supply chain expenses even higher. General inflation continues to impact the cost of goods and services worldwide, creating an environment where operating costs are rising faster than anticipated.
Given these challenges regarding transport, energy, and overall supply chain costs, we are forced to implement a price increase of 3.4% starting November 1, 2024. This adjustments is necessary to maintain the high level of service and value that you expect from us.
For now, we will continue to monitor the situation closely and take appropriate action when needed.