Freight-cost pain intensifies as Covid scare rocks ocean shipping
SOARING freight rates and delivery delays have sparked a global backlash by companies frustrated about the destructive mix of deteriorating service and higher ocean shipping costs, reports Bloomberg
16 February 2021 - 19:00
Trade associations in China have raised antitrust concerns with the government, while similar pressure is simmering in Brussels, where the European Shippers' Council petitioned the European Commission to address 'outrageous price hikes' by cargo carriers. In Washington, the biggest lobbying group for retailers wants authorities to scrutinise the playing field.
The problems in the US go beyond the cost burdens: Overwhelmed ports and container shortages along key transpacific routes are causing delays and lost business for exporters. Some store chains and manufacturers - reliant on international supply lines - are being forced to cut other expenses or rethink that strategy altogether.
The Federal Maritime Commission launched an inquiry late last year into port congestion, but bottlenecks persisted.
'Our freight costs will probably be a pressure point for us over the next, I don't know, three months or six months,' said Greg Hackman, chief operating officer at California's Boot Barn, citing port pileups.
According to a January survey of 901 users of Hong Kong-based Freightos, an online shipping marketplace, 77 per cent of small- to medium-sized importers reported supply chain difficulties over the past six months, and of those, 44 per cent said they raised product prices as a result. Companies with less than US$5 million in revenue were suffering more and likelier to pass on the costs to customers.
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