Freight News, Sea, Logistics

Scarce boxes push up import costs

[ May 4, 2021   //   ]

Internet retailers and other importers from the Far East are facing major supply chain disruption and increased costs because of the global shortage of shipping containers, says e-commerce fulfillment and specialist, Walker Logistics.

The scarcity of containers has pushed up shipping prices to near record highs: by the end of 2020, the cost of shipping goods from China to Northern Europe had quadrupled from levels at the start of the year. 

Head of marketing, Charlie Walker, said: “The container crisis is increasing the pressure on British retailers and manufacturers at a time when businesses are already having to contend with the impact of Brexit and the pandemic on their profitability. Many internet retailers are understood to be running out of stock of certain items while manufacturing firms have reported delays in production as a result of the difficulty of getting vital component parts from Asia.” 

He adds that there are reports of British internet retailers burning large quantities of returned clothing originally sold to customers in mainland Europe because it is more cost efficient to dispose of returned goods that way than it is to pay for them to be freighted back to the UK. 

The container shortage is partly a result of the increase in demand for shipping during the pandemic when online shoppers spent more on home improvements, furniture and products for their new home offices. The huge volume of personal protective equipment and medical supplies passing through the world’s ports has also been a contributory factor as has the fact that container production dipped dramatically at the height of the Covid pandemic as a result of absenteeism at the Chinese factories that make them.

The problems have been compounded by delays to ships at ports by Covid-related manpower issues as both port staff and ship’s crew members contracted the virus.

With blockages still building up in global trade lines, Charlie Walker advises any business that imports products from Asia to order their next consignment much earlier than they normally.

“The pandemic has resulted in an unusually high demand for goods ordered online. With the logistical bottlenecks affecting imports of products or components from the Far East unlikely to ease until Covid vaccines have been rolled out across the world, UK businesses have to reassess their purchasing strategy,” he says.