Aramex UK: It’s essential for retailers to adopt a flexible and forward-thinking approach over the coming months

Aramex UK, one of the UK’s global logistics and transportation providers, has urged for calm amid British retailers rushing to bring forward their Christmas plans this year due to ongoing trade route disruptions in the Middle East.

Nearly a year on and attacks in the Red Sea by Houthis rebels continues to upend trade routes, resulting in a chain reaction that is still being felt by maritime shipping.

Around 14 % of the world’s global trade transits through the Red Sea, highlighting its importance as one of the world’s foremost maritime chokepoints. However, due to heightened risk, the number of vessels crossing through this vital trade corridor have plummeted so far this year, with a significant amount of maritime traffic still being diverted to the next best shipping route around the Cape of Good Hope.

However, with transit times being increased by 10-14 days, reconfigurations to regular service have caused an uncomfortable ripple effect across retail supply chains, leading to increased shipping costs, a lack of ships available due to vessels being tied up on extended routes, and extensive congestion at key ports.

According to Aramex’s Regional CEO for the UK and Europe Umar Butt, this spillover has sparked concern among some British retailers about their readiness as the busy holiday season approaches.

With the business currently working with several of the nation’s most esteemed fashion and retail brands, Umar has observed a significant increase in inquiries about Christmas-related shipment bookings, coming in several months earlier than usual.

Umar commented: “Throughout the summer we’ve seen an increasing number of our retail client’s book well in advance compared to previous years to ensure they’re well stocked in preparation for the peak season.  With the festive season following hot on the heels of Black Friday, it’s a turbulent period, so while the panic is understandable, there needs to be some pragmatism as the inclination to order shipments in early could actually snowball into a wider issue.

“Supply chains are already stretched as it is, with many vessels still being forced to divert past Africa in order to give a wide berth to the Red Sea and the Houthis rebels. With less ships currently available due to them being tied up on longer routes, this has not only put a strain on existing capacity, but also caused congestion at major ports as a result of backlogs.

“The current situation is therefore creating the perfect storm for further disruptions over the coming months. Many retailers are already making knee-jerk decisions by attempting to mitigate these risks by bringing forward their shipment schedules, particularly for crucial holiday inventory, and while this strategy makes sense in principle, the rush to book earlier shipments is going to do nothing more than place additional strain on an already overburdened system. It’s a classic case of an intervention causing the very thing you’re trying to avoid.”

To avoid this backfire effect, Umar Butt suggests that taking proactive steps to strategically plan for the upcoming peak season is key to maintaining stability and ensuring smooth operations over what is an already hectic time for retailers.

Umar continued: “It’s essential for retailers to adopt a flexible and forward-thinking approach over the coming months as there’s still a lot of uncertainty. Heightened shipping costs, delays and disruptions are just some of the issues facing retailers and their ability to meet customer demand during the busy season.

“But the fallout from such issues can be tempered by working closely with their respective logistics partners to forecast demand accurately and secure shipping capacity well in advance.

“Considering alternative transportation options if necessary is also important as there’s no way to account for future unwanted delays or unforeseen disruptions. Uncertainty is the only certainty there is, so having a contingency plan in place is essential to ensuring operations continue and the flow of shipments is maintained in the run up to the holiday season.”