Freight congestion is pushing up prices and costing companies
Freight congestion is another factor for buyers to take into account when getting goods onto shelves and minimising the impact on consumers. The shipping surge is keeping freight rates high and starting to hit exporters, manufacturers and the increase in costs are being passed onto consumers. Its critical for buyers to factor these into product margins and to make sure they are getting the best cost and the most efficient service.
Christmas shopping is well underway and since lockdown retail spend is up on last year (see graph 1).
This means import volumes are extremely high as retailers restock inventory and that is causing delays and adding costs. This volatility and capacity constraints are overwhelming some NZ ports (Congested ports cause shipping delays) and worldwide it’s causing a shortage of empty containers at Asian origins (see graph 2).
Ships are waiting offshore (not only in NZ) for a slot to open at the port so they can unload their containers. This is also impacting exporters as some carriers are prioritising getting empty containers back to Asia quickly, instead of waiting to load exported goods. The freight crunch is also felt in the sky, as air rates were up in November and capacity is limited.
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