IRELAND’S BEDDING AND furniture industry is getting to grips with higher shipping and shortages of raw materials thanks to global supply chain blockages.
With consumer demand coming roaring back after the global slowdown last year, producers of a variety of goods across the world are finding it difficult to keep up.
On the supply side, a series of unfortunate events in recent months including the Suez Canal blockage, bad weather in the American south and cyber attacks have conspired against global supply chains already under pressure from the pandemic.
Global supplies of semiconductors used in microchips, plastics and cardboard have all been constrained as a result.
Yesterday, chocolate-maker Cadbury said that unexpected demand for flakes in Britain and Ireland could cause shortages in the summer months.
Mattress and furniture-makers are now feeling the pinch. They’re under increasing pressure to pass the costs onto retailers and consumers.
“From speaking with my suppliers, the price of springs have gone up. The price of wood, which they used to make [bed] bases has rocketed,” Michael Flynn, better known as Mattress Mick, told The Journal.
One of Flynn’s major suppliers is Peter Caffrey of Caffrey’s Furniture and Interior Creations.
His company — which makes mattresses, bedding and furniture at a manufacturing facility in Oldcastle, Co Meath — uses raw materials sourced from abroad and shipped to Ireland.
“I’ll give you an example: our timber comes through England,” Caffrey says.
“The price went up 5% in January; 5% in February and March. On the last day of April, we got a notification saying it’s going up 20% on top of that.”
Ireland is a net exporter of wood but delays in the processing of tree-felling licenses have left the economy increasingly reliant on imports, which are constrained for a variety of reasons.
Brexit is one factor but Caffrey says the price spike has more to do with blockages in global shipping, compounded by a freight container shortage, which have caused transport costs to skyrocket across the globe.
Last year, the crisis crystallised in Asian countries, particularly in China, when containers sent elsewhere in the world couldn’t be repatriated to their home countries because of Covid restrictions.
Increased demand from both consumers and businesses — many of which are stockpiling to hedge against future disruptions — have exacerbated the container issue in 2021.
In January, Swedish furniture giant IKEA labelled the shortage a “global transport crisis”.
“This time last year, we were paying between $2,500 and $3,000 for a container from China,” Caffrey says.
“You’ll be very lucky to get that for $10,000 now.”
Although shipping costs seemed to be on the decline after Christmas, Caffrey says they “shot back up again” after the Suez Canal incident when the waterway was blocked for a period of six days after a ship ran aground in March.
Experts say the impact of that will be felt for months with delays caused by the incident still clogging up ports across the globe.
In general, freight rates tend to increase sharply from July and August onwards as retailers and producers stock up ahead of the back to school rush and Christmas.
“But shipping costs should be down at this time of year and they’re not,” Caffrey says.
Foam shortage
Another issue for mattress and bedding producers globally is a shortage of foam, the price of which has skyrocketed in recent months.
A severe storm that hit the American south-east in February literally froze the pipelines of companies that produce chemicals used to make polyurethane, the key ingredient in the manufacture of foam.
Plant shutdowns and chemical shortages in Europe, the UK and Asia coupled with a sharp, sudden rise in demand for foam and other building materials as economies reopen haven’t helped the situation.
Caffrey, who gets his foam in Britain and Germany, estimates the price of the raw material has risen “probably 90% in the past 12 months”.
“The way the suppliers operate now, they’ll only give you at the end of the month and then the prices are reviewed at the end of every month,”
“It’s very hard to operate that way,” he says.
Caffrey says he’s is concerned about the impact on consumers.
“Customers can’t afford this price increase and it’s going to send the cost of building houses mad as well,” he says.
Although the cost of raw materials is rising, Mattress Mick says his suppliers haven’t increased their own prices at the same rate. As a result, he hasn’t had to hike his own prices too severely just yet.
“I think our suppliers have been very fair, in fact,” Flynn said.
“But I don’t know how long they’re going to be able to sustain that margin, because prices are continuously creeping up, particularly wood.”
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