$3m and Counting

We’ve just passed a very uncomfortable milestone for 2021 – over $3m more spent by Mila on freight costs than in the last comparable year, which was 2019. (To be precise, the figure is $3.26m.)

The increase in sea freight costs to ship goods in from the Far East have obviously been well documented – not least by me – and we’re still paying more than $17000 (£13000) per 40ft container, compared with around $2000 (£1500) in normal times. As a result, we’ve paid out $1.9m more in sea freight costs this year than we did in 2019 and inevitably, we’ve had to impose a freight surcharge on customers to offset at least a portion of that.

What customers might not realise though is that we’ve also spent more than $1.3m in airfreight in 2021 to try to ensure that loyal customers were not let down when they needed stock urgently. This is 7 times more than we would normally spend on flying product in, and I hope demonstrates the enormous effort we made at Mila to keep the wheels turning in 2020 and 2021.

I can say with my hand on my heart that we were very much on our customers’ side throughout the crisis and continue to be so. In a recent post, I shared the fact that, by March 2022, we’ll have a massive 45% more stock on the shelves here in Daventry than we did in our previous peak, which represents a massive investment for us and is all part of our commitment to restoring our OTIF levels to 98%+.

Obviously, I appreciate that surcharges and the price rises are difficult to take when it feels like they are coming from all sides, but I hope customers will be able to see the bigger picture and appreciate the extraordinary lengths that many suppliers – and particularly Mila – have gone to over the past couple of years to support customers.

Richard

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