Wednesday, May 12, 2021

European retailers face shortage of goods as shipping costs skyrocket

Must read


the rising cost of shipping goods Asia is causing a shortage of consumer goods in Europe for importers of everything from home furnishings, bicycles and sports equipment to children’s toys and dried fruits.

China’s empty container shortage has quadrupled prices on maritime trade routes to Europe in the space of eight weeks, with costs reaching record highs as shippers and freight forwarders compete for power. space on ships.

As a result, retailers and manufacturers told the Financial Times that they were starting to experience shortages of finished products and Components.

Youri Mercier, deputy secretary general of the Federation of the European Sporting Goods Industry, whose members include Nike, Puma and Adidas, said delays of several weeks were having a “huge impact” on businesses. “If the winter collections arrive months late, there’s a big problem,” he says. “It’s Covid, Brexit and now this.”

Frucom, which represents Europe’s dried fruit and nut traders, said in a letter to the European Commission this month that one of its members was quoted as $ 16,500 to ship a 40-foot container, up from 2,150 $ in November.

“Several members have indicated that their clients intend to cancel [goods] contracts this year because it destroys the [profit] margin they could have gained, ”the letter said. “Some deliveries scheduled for December are only now reaching our businesses.”

Halfords, one of the largest bicycle retailers in Europe, reported gaps in their stock caused by shipping issues and mentioned freight costs and disruption in their latest trade update, although they said it had better access to manufacturing and transportation capacity than its smaller competitors.

Line graph of the Freightos Baltic index showing China-Europe freight rates soar

Steve Garidis, executive director of the Bicycle Association, said: “There has been disruption and the cost of securing containers is up to 10 times higher than a year ago.”

Gary Grant, founder and executive chairman of UK toy retailer The Entertainer, said the “ridiculous” freight rates “had a huge impact” on prices. He usually brings in around 50 containers a week from the Far East, but “we have about 200 containers behind what we should be right now because we can’t justify paying for the shipping.” did he declare.

Lorenzo Granata, owner of Nano Bleu, the largest toy retailer in the historic center of Milan, said: “Product availability is lower, which explains the skyrocketing costs. . .[Online]platforms and stores that can secure products that are largely unavailable can pretty much put whatever price they like on those items. “

Peter Sand, an analyst at the international shipping association Bimco, said the higher prices “mainly affected small importers and retailers rather than the Tescos, Walmarts and Ikeas of this world” who ship more goods and tend to be given priority by carriers.

Line graph of the purchasing managers index in the manufacturing sector (below 50 = the majority of companies declared an increase) showing the delivery times of the suppliers extended

In a survey of 900 small and medium-sized businesses by the global Freightos freight market, 77% said they had experienced supply chain difficulties in the past six months.

Helen White, co-founder of UK furniture group Houseof, said the company would not make any profit on goods shipped since December due to increased freight rates. “It’s a nightmare. Not only are the prices going up, it’s hard to get a container even if you’re willing to pay $ 10,000,” she says.

Ms White, who paid $ 1,600 for a container in November, lets customers reserve inventory for future delivery: “If we could only sell product in the warehouse, we wouldn’t have anything to sell.”

Supply constraints are also having an impact on production in the eurozone, according to a growing proportion of manufacturers in an IHS Markit survey released last week. Supplier delivery times extended in January by the greatest amount since survey data was first available in 1997 – with the exception of April of last year, when lines of business supply have been affected by the pandemic.

The European Association for Shipping, Transport, Logistics and Customs Services and the European Shippers Council warned in a joint letter sent to the European Commission last week that “the increase in freight rates” and “Delays in delivery” meant that many of their members were struggling with “Operational Supply Chains”.

The European Commission told FT that Brussels was aware of “sharp price increases in container shipping markets recently, both on routes to and from the EU and in other parts of the world. world”.

But it was not clear at this stage whether the situation was the result of anti-competitive behavior and whether intervention by regulators could be justified.

“In the current situation, there are many factors that could be behind the price increases, such as high fluctuating demand, port congestion and container shortages, in closely linked markets globally,” said the Commission. “We are talking to market players to fully understand the current circumstances and consider ways forward.”

Additional reporting by Jim Brunsden in Brussels and Silvia Sciorilli Borrelli in Milan

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article