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Customer Communication
Temporary Surcharge

January 2021 / Other

As you may be aware, there has been and continues to be major disruptions in the shipping of goods across the globe; this situation has been ongoing since the early part of 2020.

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As the market reacts to these unprecedented, fast-moving changes in cargo demand, the carriers have taken actions which have resulted in significantly reduced capacity within the global cargo supply chain; this has led to the goods shipping infrastructure becoming overwhelmed.

 

At this point in time, cargo volumes are estimated to be 60% or more above normal volumes and continuing to rise, this is causing severe congestion at outgoing ports across the world. In this extraordinary environment the purchase cost rates for container transport are skyrocketing and carriers have cancelled supply contracts with their customers, including Drive DeVilbiss Healthcare, forcing the purchase of container space on the open market. The open market rates are being charged at 4 to 6 times the regular contracted rates we normally paid for goods transport, and there are various additional surcharges and fees on top. Industry experts have recognised that the situation has caused staggering increases in costs for shippers (please see here).

 

For several months, Drive DeVilbiss Healthcare has absorbed 100% of the impact of these disruptions. Now, however the disruption has got to a point where this is no longer viable. In order to continue to service our customers and ensure that our products get to the people who need them, we have no choice but to pass some of these additional logistics costs on.

 

From January 25th 2021, Drive DeVilbiss UK will be implementing a temporary and transparent surcharge across our product ranges. The amount of the surcharge will vary according to the impact of the freight increase incurred on each product. UK Manufactured items will also be impacted due to our parts supply chain; however, the surcharge will be limited to 2% in most cases for these items. Our sales teams will contact you with more specific detail of the cost increases over the coming days.

 

The temporary surcharge is intended only to pass on some of these unabsorbable costs we are being burdened with; as a result, Drive DeVilbiss intends to adjust the surcharge costs as the situation changes and discontinue the surcharge once this supply issue is resolved. We will update you on the situation in respect to freight costs on a monthly basis and be fully transparent to ensure that any impact on both our businesses is minimised.

 

We appreciate the business you place with us, and we appreciate your support and bearing with us during these challenging times.

 

Yours Faithfully,

Richard McGleenan
Group Managing Director, UK.

 

For a downloadable copy of this news item, please click here.