Shipping Prices Will Affect You - Why You Should Order Your Goods Now!
So, you may or may not be aware that many retailers are facing a crisis at the moment (including us). The price to ship containers from China has increased in order of magnitude compared to what the price normally is.
Of course, most shoppers aren’t too bothered at the moment and most feel it doesn’t affect them. However, please consider this article a small heads up on what will happen in the coming weeks and months.
The way in which this crisis will affect buying decisions is going to be profound. I really don’t think consumers really know how bad this is going to affect them.
Fact: Every single retailer that imports their goods from abroad all face the exact same problem. Shipping prices!
Shipping prices are going through the roof and it will affect every retail category you can think of. So,here’s the thing, there are still a few retailers that still have stock that can last them. However, The vast majority of them are now going to wait and see whether these prices will come down.
Here’s an extract from the FT:
The cost of shipping goods from China to Europe has more than quadrupled in the past eight weeks, hitting record highs as a shortage of empty containers stemming from the pandemic disrupts global trade.
The cost of shipping a 40-foot container from Asia to northern Europe has increased from about $2,000 in November to more than $9,000, according to shippers and importers.
Lars Jensen at consultancy SeaIntelligence said: “It’s a bottleneck problem . . . These rates are being driven by customers fighting over a limited resource — containers.”
Thousands of empty containers were left stranded in Europe and the US in the first half of 2020 when shipping lines cancelled hundreds of trips as coronavirus lockdowns caused a sudden slowdown in global trade.
When western demand for Asian-made goods rebounded in the second half of the year, competition among shippers for available containers sent freight rates soaring.
Will Things Get Better?
Unfortunately, from what we hear from our sources the situation is likely going to get worse before it gets better.
As less and less containers arrive with stock and less orders placed for said stock, retailers will have no choice but to increase prices.
Where Does This Leave Us?
So, where does that leave you the consumer? It means that you will gradually start to see prices increase for lots of goods (especially large goods like furniture, beds etc). In essence, the larger the item is, the more it will need to increase in price to cover the extra shipping costs.
This article isn’t some sort of cheap ploy to rush you into purchasing from us. Far from it. It’s literally here to give you an advanced warning of what will happen for many potential purchase items you’re looking to buy this year.
Is it worth waiting to see if prices stabilise? In order for prices to stabilise, there will need to be a resurgence in the amount of stock being ordered and new shipments arriving into the UK. Unfortunately, even if this does happen, we won’t really feel the effect of this until well into 2022.
That’s a BIG guestimate since no one knows how many possible lockdowns we’ll have and how many new and different strains of Covid surface.
Our recommendation is to hedge your bets and buy what you need now and early. Not only does this safeguard you against future price increases. But, it also allows you to save money for other purchases you’re likely to make throughout the year.
Paying an extra 30-40% on your purchases will really decrease your buying power and will likely mean that you may have to cancel or even postpone a purchase until later next year when hopefully the prices return back to some sort of normality.
Is Brexit Having An Effect?
Oh, no!!! I mentioned the “B” word.
To be honest, Brexit is having less of an effect than you would think. There aren't really any problems having goods shipped from Europe. However, what has been affected is the price you pay on some goods based on how much tax or VAT that needs to be paid.
Thousands and millions of goods are still being imported as normal, so this doesn't really have that much of a bearing on things.
Our shopping habits may change slowly, though. Where we have been used to our goods being manufactured and shipped from China, you may see an increasing amount of goods manufactured and shipped from Europe. You may also see a bit of a renaissance in UK manufacturing dare I say.
I don’t think you’re going to see rapid changes, but, they will start to filter through by the time 2022 rolls around.
Ironically, in the long term it could be argued that what is going on with both shipping prices and Brexit could have a major impact on the number of new manufacturing industries set up in the UK to fill the void.
There’s no telling just how many will set up, but there is a distinct possibility that there will be quite a few in the coming months and years. We’ll have to wait and see?