How the current geopolitical landscape is impacting businesses within the UK.

The impact of the conflict in the Middle East is being felt by everyone globally. Higher gas and electric prices not only impact our daily commuting and heating expenses, but also drive-up manufacturing and logistic costs. Many businesses are attempting to swallow these additional fees, to prevent passing them along to their customers, yet with prolonged disruption likely, it is inevitable that costs will need to be recouped through price increases in the future.

Fertilisers have also been impacted in several ways. Nitrogen fertiliser is not being produced, thereby reducing crop yields, which will inevitability result in shortages and increase the price of food. China has restricted fertiliser exports to ensure domestic supply, which means many countries in Asia who rely on these imports are left in a precarious position. If countries like Vietnam and Thailand cannot source their usual levels of fertiliser, this will impact their planting season and result in a reduced crop yield, which will be felt towards the end of the year by those that rely on these harvests for much of their food.

Locally, our farmers are also impacted by these restraints, as most of our fertilisers arrive via the strait of Hormuz. The increased cost of fuel and fertiliser could impact planting decisions in the UK this autumn, raising next year’s food prices. Unlike other countries, we do not have a stockpile of food available to fall back on and rely heavily on imports, so rising food costs would be felt quickly, hitting those on low incomes hard.

In addition to this, the price of CO2 is rising, adding to the growing likelihood of food inflation. Fruit and vegetables grown in glasshouses heated with natural gases, beer and fizzy drinks, as well as fresh meat and salads, often packaged with CO2 to extend shelf life, are all likely to be affected.

Medical supply chains are likewise impacted by the continued conflict, as the industry relies heavily on energy-intensive manufacturing and sources pharmaceutical ingredients from countries around the world. Issues sourcing ingredients, as well as increased production costs, result in manufacturing delays and price spikes.

Manufacturers will typically keep stock in bulk to avoid supply issues, but some medications are more fragile, with a short shelf life due to the stability of the ingredients used. These often have unique storage requirements to preserve their efficiency and safety, so many require a temperature-controlled environment to enable this. Transportation delays therefore result in potential product loss if stock arrives after its use by date or the temperature of the environment it’s being stored in becomes unstable.

Keeping an eye on what is happening geopolitically is imperative to ensuring businesses continue to thrive, as a proactive approach in times of turmoil can prevent or at least minimise unforeseen financial losses, job redundancies and missed opportunities.

Operational expenses are already escalating, with petrol, gas and raw material costs all growing, meaning that our industry like many others is being impacted. Nitrogen and CO2 for example, are just two of the gases commonly used in both the operation and maintenance of our temperature-controlled refrigerated containers.

Our team of experts are actively monitoring gas prices, to allow us to continue providing a high level of service, whilst keeping our prices fair and sustainable. We aim to support our customers during this period of uncertainty, by continuing to supply the cold storage you need, during a period where temperature-controlled storage is vital in extending the shelf life of goods which are harder to source.

To find out how we can help your business, call the team today on 01473 261780.