Steel prices at record high

IT’S NOT like you can build racking out of lego. The industry relies on steel and steel prices have reached a record high, says José Manuel Lucio. 

It is not specifically related to the UK, and is a result of EU anti-dumping regulations aimed at China, as well as a bounceback in demand in the wake of Covid.

Jose explains: “We are living, since the end of 2020, with a big steel crisis. We have the highest prices of steel ever. And we also are facing a shortage of steel supply in Europe. This has created great turbulence and volatility in prices and delivery. This is a big issue, much greater than Brexit. 

“We are observing what is happening very closely and playing very fairly with our customers, so we can adjust our delivery times and prices in advance, so that when they approve an order, everything is guaranteed.”

The background is a ten year period of growth for AR Racking, partly due to the eComm boom. This has prompted AR to adjust its structure to approach the market, into three broad channels: distribution, direct sales, and through systems integrators. Jose is responsible for distribution and direct sales in the EMEA region.

The Covid pandemic itself also provided a challenge. 

Jose says while staff at AR Racking were accustomed to a little home working, and using Apps such as Teams, these trends accelerated greatly during the pandemic and it was a big challenge to manage the business more remotely. 

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“In the factory, people needed to be there physically, but for office workers, it changed. We had no time to prepare, but we did it, and we have to be positive about how we have managed,” says Jose.

In business terms, there were some difficulties in the initial months, mainly because of restrictions around transport and assembly, which are key parts of the AR offering. But the market continued to have strong demand.

“Obviously all business related to eCommerce are booming and we’ve also seen a transformation in smaller, or more conventional companies, who have been trying to adapt themselves to a more B2C model.”

Brexit on the other hand was relatively un-disruptive for AR Racking. 

Jose says: “It did create uncertainty, everyone was apprehensive. Obviously we have more paperwork, charges and bureaucracy to deal with. But overall demand has been good, although there were demand fluctuations due to overstocking of products, for example.

“In the end the most important thing has been the transportation crisis, not only for our business but for the whole country. We are still facing challenges, the UK is facing a serious shortage of truck drivers and trucks.”

For more information, visit www.ar-racking.com

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