The sudden escalation of conflict in the Middle East created almost instant disruption across global trade, and the promotional products industry, like many others, is already feeling the effects.
Supply chains had barely recovered from the pandemic and cost of living crisis, and now this latest development is introducing new challenges across freight, logistics and cost management.
While it’s easy to feel overwhelmed, recent history has taught us that there are solutions to every problem, even if they feel harder to find.
For promotional product suppliers and distributors, understanding what is changing and how to respond is the first step to maintain service levels and protect margins.
Shipping rates have risen immediately following the closure of the Strait of Hormuz, a route responsible for around 20 per cent of global oil supply. In response, shipping lines have introduced fuel-related surcharges to offset higher operating costs.
These rising energy prices are affecting both sea and inland transport, increasing the overall cost of moving goods across supply chains. Additional emergency rates have also been applied to cargo already in transit, as operators adjust routes, secure storage and manage ongoing disruption.
While the immediate impact is concentrated in the Middle East, higher fuel costs and surcharges are expected to push up freight rates globally.
As explained in Air Cargo Week, as ocean timelines become unpredictable, time-sensitive goods (electronics, pharmaceuticals, and automotive parts) are migrating to airfreight, tightening belly space and driving rates higher on key corridors.
Australia relies heavily on goods shipped from China, which is unfortunately affected by activity in the Middle East. As reported in the South China Morning Post, logistics costs have climbed by about 15 per cent, and deliveries are increasingly being delayed.
For some operators, shipping costs for finished products have surged by 50 to 100 per cent, while road freight costs on the China-Vietnam border have also climbed by 15 to 30 per cent due to the rise in global oil prices.
Here at home, anything that can be manufactured or sourced locally is a safer bet, otherwise it’s a matter of keeping in touch with suppliers, figuring out what is possible and explaining the reality of shipping delays and costs to clients.
At home, Australia Post has tripled its fuel levy for thousands of business customers to combat surging prices caused by the Iran war.
Reports last week explained that the provider’s surcharge will increase from 4.8 to 12 per cent for around 30,000 contract customers from April 23. Customers under its express and premium StarTrack offering will see the surcharge increase from 15.5 to 22.7 per cent. There will also be no change for more than 250,000 MyPost Business customers.
If your business sends goods in large volumes, you may want to discuss with a freight broker how you can minimise costs.
Unleaded and diesel petrol costs have risen across the country and this has everyone on edge but it’s important to avoid focusing on worst-case scenario projections.
It was confirmed last week by Prime Minister Anthony Albanese that six tankers of jet fuel from China would arrive in Australia between 28 March and 8 April, which should ease supply issues, at least for the short term.
At a national level, crisis meetings are ongoing as taskforces consider everything from work from home mandates to temporary cuts to the fuel excise. That sales tax is set at 52.6 cents a litre of fuel bought, with a halving to potentially save motorists 26 cents a litre.
While ongoing disruption can feel unpredictable, there are practical steps promotional products businesses can take to stay in control and keep projects moving forward.
Extended lead times are expected across both international and domestic supply chains. Where possible, allow additional buffer in production and delivery schedules, particularly for time-sensitive campaigns or large-volume orders.
Setting realistic expectations early with clients can help avoid pressure later and protect relationships.
Regular, proactive communication with your suppliers and clients is more important than ever. Stay close to updates around stock availability, production timelines and freight movements.
Having contingency plans in place, including backup options for popular items, can help you respond quickly if circumstances shift.
Relying on a single supplier or freight pathway can increase risk in the current environment.
Exploring alternative suppliers, splitting shipments or considering local sourcing where feasible can improve resilience. Even small adjustments can make a meaningful difference when delays arise.
Rising freight and fuel costs are putting pressure on margins across the industry. While it’s tempting to try to absorb costs, and of course you need to act with caution, now is a good time to review your pricing structures and consider how additional costs can be communicated to clients.
Keeping up to date with freight trends, fuel movements and government announcements can help you make more confident decisions, and monitoring industry updates allows you to anticipate changes rather than react to them.
However, it’s easy to be overwhelmed by scare-tactic headlines. Make a habit of limiting the number of news articles and videos you consume each day and stay focused on what you are able to control.
Above all, this is a moment for steady decision-making. The promotional products industry has proven its resilience time and again, and while conditions may shift, businesses that remain proactive and adaptable will be well placed to navigate what lies ahead. Through this latest challenge, APPA is behind you.
