Postage And Shipping

5 mins. to read
Postage And Shipping

Tanker Traffic Being Choked 

It is reported that tanker traffic on the Suez Canal has slumped progressively over the last few weeks. 

That is not surprising considering the dangers created by the missiles fired by Houthi rebels attacking shipping as it transits the Red Sea. 

Apparently, experts have warned that the UK should brace itself for a prolonged period of military action in the Red Sea. 

Rishi Sunak stated in Parliament that he could not rule out a prolonged and persistent campaign in efforts to protect civilian shipping in the region. 

Already we have seen major energy groups suspending use of the Suez Canal due to the Houthi hazards. 

That has brought about major re-routing of the tankers, with freight such as oil and gas, as well as general household goods and materials, now tripping around the Cape of Good Hope, which is costing so much more in time and fuel. 

It is inevitable that the maritime choke points are now threatening supply chains across the world, which in turn will see prices being driven higher. 

Companies Going Bust 

In one of Begbies Traynor quarterly notes they warn that some 47,000 companies in the UK are on the brink of going bust. 

Driven by higher debt levels and rates too, they are finding the going somewhat tough. 

Perhaps they need the advice of Martin Sorrell, the well-known expert and growth pundit, to help sort out their problems, however he is busy himself as he suffers with S4 Capital’s own problems as it faces unpredictable times. 

Shrinkflation Still Rampant 

We may well be seeing steadier grocery costs, which Sunak and co grab as headline news, but what about the increased shrinkflation. 

It really was notable at Christmas when tins of chocolates and sweets were passed around – not only were they more expensive but also the contents were less. 

Toothpaste tubes are thinner, while sausages contain less meat and more filling. 

I can understand why manufacturers need to reduce weight levels as they continue to suffer price pressures themselves. 

They must find it very difficult continuing to supply the major retailers who are forever price conscious on behalf of their own customers. 

Maintaining price points to attract the shoppers is very necessary, but that is obviously met by squeezing contents in bulk and quality. 

Disposable Income Highest For Two Years 

It was good news to see that disposable incomes, in the final quarter of 2023, were recorded at the highest levels for the last two years. 

That is just what families need to see and feel, especially in a General Election year, despite still being lower than pre-Pandemic levels. 

Retail sales Fell In December 

The 3.2% fall in retail sales last month surprised a lot of observers in the City, but perhaps not that many actual shoppers themselves.  

Train strikes, bad weather and the like cannot have helped. 

Overall, I understand that 2023 recorded the worst retail sales figure for five years. 

The spending public needs to see lower interest rates to encourage them to increase their buying. 

The Royal Mail Monopoly Is Questioned 

In these times of AI and all the advantages that the Internet has given us, it surely must be asked exactly why does The Royal Mail still have its monopoly? 

With the number of letters posted each year having fallen from some 20bn to just 7bn in 2023, surely its days are being numbered. 

Questions over its delivery times are being frequently discussed. 

The group’s management is seeking alternate weekdays for letters. 

I don’t know how much mail you might receive on a daily basis, however I would not object to every other day during the week for my deliveries – which increasingly is mainly advertising material. 

Potholes – £13bn To Spend? 

I wonder what Jeremy Hunt has up his sleeve for his 6th March Budget. 

It would be good for the country’s infrastructure if a major push was given to the repair and resurfacing of the UK road system. 

Potholes galore have caused incredible damage to cars across the country. 

The AA alone has reported that it attended 631,852 call outs for tyre, wheel, steering and suspension damage caused by potholes – at a cost to drivers of around £474m. 

Did you know that the UK spends the least out of 13 top nations on repairing its roads? 

What do we get in return for our annual Road Tax payments? 

It surely does not take too much nouse within Government to realise the impact that this lack of road attention is having. 

Just imagine what could be done with the estimated spend necessary to fix the roads – some £13bn – that sum would be a self-feeding economic boost in itself.  

Especially so if you think of all those to be employed in the task. 

The consumer spend by the workers involved would be incremental and tax income creating. 

The Evergrande affair 

The Chinese Government is said to be ready to prop up the country’s equity market after it recently slumped to a five-year low. 

It may well need to be doing that in the next couple of weeks, especially if the Evergrande property empire is judged to be insolvent. 

The New York Times has commented that: 

“Once heralded as China’s biggest property developer, Evergrande paid the price for years of reckless borrowing and overbuilding after the Chinese government cracked down on debt to limit the potential systemic risk from a property crisis.  

Evergrande became a symbol of the excess fueled by China’s property bubble.” 

The company’s case comes back to Judge Linda Chan in the Hong Kong court on the 29th of this month, as it seeks protection while it tries to restructure its debts and thereby avoids liquidation of its considerable assets. 

A major creditor, Top Shine Global, has filed a winding-up petition on the group, possibly proceeding into the hands of accounting group KPMG as independent liquidators. 

The loss-making Shenzen-based group is said to owe more than $325bn and has been failing to make payments on several of its multi-billion loans. 

Is it too big to fail – certainly it is of great concern not only to the group’s creditors, but also to the Government itself as it faces the quandary of whether to support the world’s most indebted group or to just let it founder. 

If it falls then there could well be several forms of meltdown on other markets within China, as well as private individuals and the group’s lending institutions. 

Comments (1)

  • Ian D says:

    The problem with Royal Mail is that the government of the day decided that competition was the name of the game. It allowed competitors (some owned by foreign governments) to take the profitable parts of the business. We now often see 4 or 5 different deliveries in our street on a single day. My own experience is that some of these other companies drive 2 or 3 miles between drop offs.
    This multiplicity of carriers creates more polution, more congestion, and more expense within the system. To help save our planet we need to return to a sensible single organisation to run our domestic letter and small parcels service.

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