The maximum of aluminum

Mica tapes

“Aluminum prices keep on rising, aluminum isn’t available, aluminum stocks have fallen to critical levels” just a handful of headlines out of the news from the past year. Due to a broad variety of reasons the prices of all raw materials, including aluminum keep on rising and availability is getting less. Of course, the wire and cable market is seeing the disadvantages of these developments.

Right at the start of this situation, HEC saw an opportunity instead of a threat. HEC Shanghai Office kept on building the relationship with our aluminum supplier, which has been leading to ongoing supplies for a good price. In the same time, our supplier has been looking into their supply chain. They made sure the supply chain was optimized for a solid corporation with HEC-Holland.

This collaboration, combined with the ability to slit aluminum tapes in The Netherlands (after the purchase of an aluminum cutter last year), made HEC-Holland a stable factor in the market.

Currently, HEC is still able to supplier her customer which is something we are very proud of.

In the future, we will keep collaborating with our partners to be able to deliver the best quality, for the best price in any market situation. In this way, we are sure we won’t let our customers down.

Curious about opportunities for your company? Don’t hesitate to contact your account manager

Movement from Goch to Tilburg

Tilburg Warehouse

Movement from Goch to Tilburg

HEC-Holland is still growing fast, also during the COVID-19 pandemic. Because of this, we were forced to move from our small warehouse in Goch to a much larger warehouse in Tilburg. In this new warehouse we are able to place more slitting machines and we can store more products. In addition, the warehouse includes a large office space with all facilities, where we can meet our suppliers and customers. The location of our warehouse is fantastic, as it is just a few minutes from Barge Terminal Tilburg. Moreover, Tilburg has a direct train connection with central Europe and Asia. We are very happy with our new warehouse in Tilburg: the logistics hotspot of the Netherlands.

Expansion of production capacity

The growth of our company has, among others, led to the expansion of our production capacity. We have our own slitting facility since one year now, however we are close to full capacity. For this reason, we are looking for new slitting machines. One year ago, we could not imagine that we already have to look for these new machines. The slitting facility that we have now, is for slitting water blocking tapes. We are now in the process of buying a new machine that can slit aluminum tapes, so that our production department can convert locally. This process was intended for one year ago, but unfortunately we had to postpone this due to corona. Nevertheless, we are very happy that this process is coming to an end.

Expansion product assortment

Additionally to the physical expansion, we spend a lot of time on setting up our ERP system. Our product assortment is growing since our office in Shanghai is busy with building relationships with new suppliers. Our colleagues in Shanghai speak the same language and have the same culture as most of our suppliers, which make it more easy to build a valuable relationship. We hope to optimize these relationships even further in the future.

Suez Canal – Global supply chain impact

Evergreen Suez Canal

Global supply chain impact is caused by imbalance in available freight space and equipment.

The supply chain consequences of the Suez Canal blockade in March will be clearly felt in the coming months. In our operations this will mostly affect the operational activities and pricing for the coming period. Where there were hopes for more stability, prices in container shipping are still sky-high. Also the tariff levels may reach new record highs as of May 1. We continue to be confronted with limitations and delays due to blank sailings, equipment shortages and congested ports worldwide.

Partly because of the aforementioned congestion in the Suez Canal, we are also seeing extra pressure in the availability of containers and the spot market. The shortage of ship space and containers will largely persist this year, resulting in high transport rates and operational restrictions. This is predicted by a maritime research firm Drewry in its latest report about developments in the container market. The prospects also note that there will be considerably more orders for the construction of new ships. There are 1.77 million TEU across 166 ships ordered in Q1 only. However, whether this capacity expansion will eventually lead to the extremely low rates of few years ago seems unlikely, according to Drewry.

Our advices to prevent possible inconveniences in your supply chain 

We would like to advise you to pay attention to matters listed below in order to limit any nuisance and to anticipate the aforementioned market situation:

  • We recommend booking your shipments well in advance. This enables us to provide you with the best possible arrangements.
  • Prioritize the most critical shipments as capacity is scarce and we face constraints and delays.
  • Include longer lead times in your supply chain calculations. Keep in mind that the average delay is currently almost 7 days.

The aforementioned challenging and volatile market situation puts a lot of pressure on our operation. Therefore, we must continue to emphasize that the options are limited and ask you to continue to take into account possible delays in the coming period.

We are here for you

We at HEC-Holland do everything we can to continue to serve you optimally and to keep any inconvenience to a minimum. Please feel free to consult your account manager and ask for our possibilities and solutions. We will also keep you updated related to this theme and future developments. 

If any questions arise, please also get in contact with our team!

HEC-Holland LinkedIn

Continuous Turmoil in Asia: feedstock price settings and significant increase on sea freight rates

Sea-freight

Continuous Turmoil in Asia: feedstock price settings and significant increase on sea freight rates

 

Dear valued customer,

With this message we would like to inform you that we are not only facing unusual times due to Covid-19, but also see that it will start to influence our business. We see that in some feedstock indicators, such as non-ferrous metals, but also on the polymer side, there is a strong increase due to market demand versus availability. One of the key factors is that there is a strong rebound effect of the business in Asia exceeding 2019 figures by average 6-7%.

The last couple of months we see very strong developments on (sea) freight notations due to a shortage on ship space and imbalance on equipment (containers). This has resulted to the strong increase at record breaking heights which has not been seen for least more than a decade.

In December, we were expecting the sea freight rates to ease by the end January when Asia would prepare for the seasoning celebration around Chinese New Year. However, we are continuously observing the sea freight market conditions and still there is an imbalance on equipment, failing synchronizing container demand versus availability. Supply chain system problems with ocean and/or feeder vessels are to be well connected, which results in delays in delivery programs.

Naturally, what you may expect from HEC-Holland is that we do our very best to make sure that the market demands cover your production requirements. Nevertheless, at this stage we cannot predict how this story will develop further. It will certainly be a dynamic half year at which we have to stay in contact with you on how we could assist you at our very best, at all aspects. At this moment we are unfortunately forced, due to the unusual unstable market conditions, to call for a “Freight Adjustment Surcharge” depending on the type of product. However, our aim is always to minimize the so-called damage.

For more information, we would request to directly contact your own account manager on how we are able to secure our joint business and what influence this might have on the commercial conditions. Of course, we try to minimize the extra cost, however, we must be realistic under the present circumstances which count for all parties.