The rising cost of shipping goods outside of Asia is causing a shortage of consumer goods in Europe for importers of everything from furniture, bicycles and sports equipment to children’s toys and nuts.
China’s shortage of empty containers has quadrupled prices on maritime trade routes to Europe in eight weeks. Costs have reached record highs as carriers and freight forwarders compete for space on ships.
As a result, retailers and manufacturers told the Financial Times that shortages of finished products and components are gradually emerging.
Youri Mercier, deputy secretary general of the Federation of the European Sporting Goods Industry, which includes Nike, Puma and Adidas, said several weeks of delays would “have a huge impact” on businesses. “When winter collections are months behind schedule, there is a big problem,” he said. “It’s Covid, Brexit and now this.”
Frucom, the European dried fruit and nut retailer, said in a letter to the European Commission earlier this month that one of its members was charged $ 16,500 for shipping a 40-foot container, against November 2150 dollars.
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“Several members have announced that their clients intend to quit smoking [goods] Contracts this year because it destroys the [profit] Margin they could possibly earn, ”the letter said. “Some of the deliveries scheduled for December are only now reaching our companies.”
Halfords, one of the largest bicycle dealers in Europe, reported gaps in their warehouse in their latest business update caused by shipping issues and mentioned shipping costs and downtime even though it had better access to manufacturing and transportation capacity than its smaller competitors.
Steve Garidis, CEO of the Bicycle Association, said: “There have been outages and the cost of insuring containers is up to ten times higher than a year ago.”
Gary Grant, founder and CEO of UK toy retailer The Entertainer, said the “ridiculous” shipping costs “had a huge impact” on prices. It typically ships around 50 containers per week from the Far East, but “we have about 200 containers behind what we should be now because we cannot justify payment for the shipment,” he said. he declared.
Lorenzo Granata, owner of Nano Bleu, the largest toy retailer in the historic center of Milan, said: “There is less product availability, which explains the increase in costs. . .[Online]Platforms and stores that can secure products that are largely unavailable can price those items as they wish. “
Peter Sand, analyst at Bimco, the international shipping association, said the higher prices affect “smaller importers and retailers, not the Tescos, Walmarts and Ikeas of the world,” who ship more goods and tend to take priority. by carriers.
In a survey of 900 small and medium-sized businesses conducted by Freightos’ Global Freight Market, 77% said they had encountered supply chain issues in the past six months.
Helen White, co-founder of UK furniture company Houseof, said the company would not make a profit on products shipped since December due to increased shipping costs. “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,” he said.
Ms. White, who paid $ 1,600 for a container in November, allows customers to reserve inventory for future deliveries: “If we could only sell things in the warehouse, we wouldn’t have anything to sell.
Supply shortages are also affecting production in the eurozone, according to a growing proportion of manufacturers in an IHS Markit survey released last week. Supplier delivery times increased by the largest amount in January since survey data first became available in 1997, with the exception of April last year when service lines public have been affected by the pandemic.
The European Association of Freight Forwarders, Transport Services, Logistics and Customs and the Council of European Carriers warned in a joint letter to the European Commission last week that “increasing freight rates” and ” Delays in deliveries “mean that many of its members struggle to maintain” operational supply chains. “
The European Commission informed Heaven32 that Brussels was “aware of the recent significant price increases in container transport markets, both to and from the EU and elsewhere in the world”.
However, at the time it was not clear whether the situation was due to anti-competitive behavior and whether regulatory intervention could be justified.
“In the current situation, many factors could be behind the price increases, such as strong fluctuating demand, congestion in ports and lack of containers in globally nested markets”, said the Commission. “We are talking with market players to fully understand the current circumstances and examine the possibilities for the future.”
Additional reporting by Jim Brunsden in Brussels and Silvia Sciorilli Borrelli in Milan