Middle East crisis: a note on price pressures
As continuing conflict in the Middle East sends prices upward, Dr Ross Moloney, CEO of LEEA (Lifting Equipment Engineers Association) argues that quality must always be valued over short-term expediency.
While the immediate impact of war is the tragic loss of lives, the economic consequences of the current conflict in the Middle East are rippling across the world as businesses face significant operational and financial challenges. An effective shut down of the Strait of Hormuz and attacks in the Red Sea are causing rising prices and a squeeze on supplies of essential petrochemicals used as raw ingredients by lifting equipment manufacturers.
Sometimes, the reasons behind increasing prices are not always readily apparent, the current situation in the Middle East, however, is creating a very real market shock that is sending prices upwards and making orders now harder, if even possible, to place.
Lifting equipment is a tight, small margin sector and in a time of shortages there is a temptation to ‘go cheap’ in the face of price increases and low availability. However, seeing this as an opportunity to find a cheaper supplier would be a significant mis-step.
If something is too good, or rather too cheap, to be true, then it usually is. The lessons of ignoring this old adage when it came to sourcing PPE during the Covid crisis still reverberate today. The cheap option is rarely the long term, high quality one. Producing compliant, trusted, long term solutions is valuable – and with that value comes a fair price.
So, during a time of short supply and high prices, we urge caution when it comes to leaving behind well-developed trading relationships. Your high quality manufacturing partners are under pressure – stick with them and they will stand by you.
Most of our members are SMEs and family owned businesses that have nurtured lifelong trading relationships. Above all they uphold the gold standard that underpins the LEEA logo. Price reflects their quality, their processes, their people and their paperwork. This is not only about value but it’s about reliability, best practice and, crucially, safety.
LEEA is an association dedicated to supporting our members and a trade body to support end users in the market place. We hope that a cessation of the conflict comes soon and that our innovative and agile LEEA members will play their part in contributing to the Lifting Industry’s vital role in keeping the global economy moving.
