Business, Forwarding, Freight News, Sea

Pandemic puts Irish imports in unchartered waters, says Woodland

[ September 6, 2021   //   ]

Woodland Group Ireland reports steep price hikes and acute delays for Irish businesses shipping from Asia.

Since October 2020, seafreight rates out of Asia have increased by 450% as demand far exceeds capacity and with reduced vessel, routing, and equipment availability.

The situation has been exacerbated by an array of factors: originally set off by the Covid outbreak which caused cancelled sailings and containers wrongly positioned in US and Europe. The situation was further impacted by the Suez Canal blockage and severe congestion in Southern China ports due to renewed Covid outbreaks there.

All this has resulted in severe disruption, causing widespread shipment delays with material shortages and great increases in cost as a result for global supply chains, Irish businesses, importers, exporters and has even reached the Irish end consumer.

Woodland Group director of global business development, Kevin Brady, commented:  “The situation is unprecedented. While we are proud that despite these challenges, we have successfully delivered an 85% success rate in FCL liftings compared to the average market rate of 50%-60% and have offered an alternative to FCL for customers through our weekly LCL offering, the impact on the industry and long-term effect is putting significant pressure on everyone importing from Asia and connected supply chains. There is no quick fix, and we can expect current rate levels to carry on through to at least Chinese New Year 2022 (1 February), while monitoring the situation closely and finding the best possible solutions as we go.”

Woodland Group Ireland is currently preparing a research paper on the impact on imported goods from Asia into Ireland. Feedback received so far from Irish clients across five main commodity groups reports a sharp increase in the cost of raw materials as well as a significant rise in shipping costs.

For example, bathroom and sanitary ware saw a 5-12% increase in raw material costs added to the increase in shipping costs resulting in an overall cost increase of between 25-30% to the Irish importer. For Outside furniture the increase in raw materials cost was 10-15% resulting in an overall cost increase of between 25-35%

For lighting fixtures the figures were  5-8% and 10-15% respectively, for tiles and stoneware 5-10% and 25-30% and for doors 10-15% and 20-40%.

Looking into the future, solutions are lacking, and concerns are increasing, says Woodland. Further outbreaks of Covid remain a worry, with higher shipping costs, delays and a shortage of equipment expected. Unfortunately for customers, it is not anticipated that these issues will be resolved in the short-term.

Feedback from Woodland’s Asia teams is that the present situation could result in shortages ahead of Christmas and into the New Year. But while it is anticipated that issues will persist into next year, Woodland will continue to source solutions to keep supply chains going.