Looking at BBC news online there is an article about soaring costs of shipping containers.

A London businessman who imports electrical goods such as domestic heaters, said the cost of a 40ft container has increased 4-5 fold in since the start of the pandemic. He is faced with the dilemma of whether to increase costs and by how much.

It made me think about our models, many of which come from China.

Will we see increases in their cost...I imagine so.  Could we start to see more production in the U.K. as a result? There will certainly be a lot of people looking for alternative employment in the coming months.
The possibility of production returning to the U.K. has been discussed on here before. Perhaps the pandemic will have altered the goal posts enough for the likes of Dapol to expand their U.K. production base. Time will tell.

OK, I know I live in Australia, but I think that expecting manufacture of N gauge locomotives in the UK again is a pipedream.

Sorry, just expressing what I think.

Having said that, long may Union Mills continue! 

Unfortunately many manufacturing skills in the UK workforce are long gone thanks to production bring shifted to China, remember production was shifted to China because of the cheap labour, not because they were better, now their labour is not so cheap, but the skills needed to setup over here are now long gone.

We were once a manufacturing power house, now sadly we are just tinkering in the garden shed, all the west does now is pump billions into the Chinese Militaries budget and then wonder why they are suddenly so powerful, the same with Russia, they went bankrupt as the USSR trying to keep up militarily with the west, then the west pumped billions into their economy and surprise surprise they spend it on new super weapons and threaten the west again.

Sorry if that sounded political.

NGM

I posted this a couple of weeks ago to show the problems for container shipments in the UK:

https://www.bbc.co.uk/news/business-54989299

Whilst I believe that the ports are slowly clearing the backlog, the article quotes $8000, but it also says that only a few weeks earlier, the cost was $1700. I've been retired for just over two years now (from the port industry) , but not too long before I finished, rates were being quoted as under $1000.

So yes, shipping costs have risen dramatically; but just think how many N Gauge models (or even OO) you can fit in a 40' box. Each individual model is only costing a small shipping fee.

I doubt the cost of the logistics of moving all the patterns, plant, tools, etc, would justify a return to UK manufacturing.

Sadly.

Martyn

Yes, shipping costs have increased significantly.

No, that doesn't justify returning production to the UK or even come anywhere close.

The significant costs in model production are tooling and unit costs of assembly - both of which are significantly cheaper than the UK.

Cheers Mike

PS I don't think characterising doing business with China as pumping money into the Chinese military is any more helpful than characterising doing business with the UK as pumping money into nuclear weapons...

You could fit more than 200,000 N Gauge rolling stock boxes in a standard 20ft/33sqm shipping container. So the shipping cost is still only a few cents per unit.

Presumably railway models are high-value cargo so the freight cost represents a very small proportion of the  selling price.

Hopefully ?

If and when items  get too expensive,  people stop buying them. I have already curtailed buying coaches on a whim due to the current price hikes from Farish.
In reality I probably have too much stock already.

Quote from: honestjudge on December 09, 2020, 12:40:28 PM
If and when items  get too expensive,  people stop buying them. I have already curtailed buying coaches on a whim due to the current price hikes from Farish.
In reality I probably have too much stock already.

The problem with that is it will guarantee that prices will go up much further. If manufacturers have to reduce production runs they will either have to increase prices or just not produce models.

I completely understand that judgements of what is expensive and what is value for money are personal decisions. We all make different decisions on what we think is a fair price.

As a manufacturer of course I would say this, but quite frankly I'd like nothing more than to be able to reduce prices and the only way I can do that is by making/selling more models per production run.

So the effect can work in both directions ie sell more models because of a larger market and prices have a chance to reduce which in turn makes it more likely that more will be sold or the opposite direction of less sales and higher prices.

As an aside I've yet to see any justification that Farish prices are particularly unreasonable. The problem is that it is very difficult to compare prices in the same range let alone across manufacturers as the key variables are unknown ie tooling costs and quantity that the tooling is being amortised over. Tooling cost alone can vary considerably just as a function of when something was tooled ie tooling the exact same item now will be considerably more expensive than it was 5-10 years ago.

So what you're saying, Mike, is that I should buy more, for the greater good? I think I can be that altruistic

There are some bitter pills when it comes to Farish's pricing. The Voyager was run in 2008/9 IIRC (I bought mine as my first N gauge model in 2009 I know!), it was ~£100. It's hard to imagine that the tooling cost wasn't amortised given it's taken 12 years for a re-run, and yet the cost has quadrupled to £400. That's £100 per coach. Dapol in the same situation are less than half the cost per coach. Ok they possibly sweated the assets a bit harder in their early life, but even so...

The 170 is similar - and pricing in parity with the new 158 for a 15 year old model with no lights or DCC capability feels optimistic. I wouldn't say it needs justifying particularly, it's a company's prerogative to price as they feel they need to, but it raises my eyebrows.

In simple terms - yes, if the market is bigger then prices are likely to come down (the Kato 800 is a good example of the impact that volume increases have on price). As I said I'm biased ;-)

I've no idea what Farish's amortisation schedule is compared to Dapol's or the cost of Farish tooling vs Dapol tooling.  There are some variations in tooling prices (and quality) across different factories where the likes of us and Dapol etc have a greater choice of factory than Farish.

You're right that some examples don't compare favourably - the 170 is a good example of that - and it is difficult to know why without sitting on the pricing discussions!  I don't know how variable the unit costs are for different models from the Kader factory or whether Farish take the view that a 2 car MU should be priced at roughly the same price regardless of prototype ie price to what they think the market will bear.

If it is the latter then the risk is if you get it wrong then you can end up deep discounting (which we've seen in the past) and which I don't think is particularly healthy for the overall market. My personal view is that if you price something fairly for the quality of the product then hopefully everyone is happy.

Cheers Mike

Curious you mention this @trkilliman the boss and I were looking at new living room suites at the weekend and a similar thing was mentioned by the sales guy, containers of furniture from the far East which were costing £2000 pre covid are now £8000-9000 which, as he rightly stated, is going to put the price of furniture up considerably and containers are on a 5 month backlog with 10s of thousands sitting on quaysides.
Even if we buy a British made suite (Ercol for example) some of their materials may come from overseas so there is still a knock on effect there.
So, not just trains 

Forgive me for saying this but what exactly is the attraction of having a model that is made in the U.K. as opposed to China? So long as there is no demonstrated benefit (quality of assembly, paint, finish etc), then why do we the consumer care?

As has been said time and time (and time) again, the biggest single contributor to a model is the unit labour cost of assembly. That is still some way cheaper in China than the U.K. Sorry if that comes across as disrespectful but the argument has happened many times on various forums of late.

If people wish to have things made here because they want to pay the people assembling them more money, then I suppose that's laudable (without knowing what the actual cost of living is in China), but other than that.....?

As an aside I couldn't imagine sitting in a factory all day doing repetitive (and in n gauge fiddly) assembly work. It would certainly put me off the hobby even if I was given the chance to purchase the models heavily discounted!

Just my thoughts, no wish to offend.

Skyline2uk