Shipping slow down
Black Friday and Christmas sales in jeopardy?
Black Friday sales, Christmas shopping, DIY jobs and renovations could be at risk as global shipping delays intensify — with significant price hikes also predicted.
Issues plaguing shipping during the pandemic have resulted in fewer container ships visiting the ports of Tauranga and Auckland.
Freight costs have escalated by 300 per cent, with some desperate businesses back-ordering stock that could take months or years to arrive.
Retail NZ said the delays were affecting almost everything including electronics, clothing, power tools, books, gym equipment and games. Two-thirds of its members were hiking prices by 7.5 per cent over the next three months to cover costs.
Tauranga Chamber of Commerce chief executive Matt Cowley said the lead-up to Christmas was the biggest period for retailers and a supply chain bottleneck “especially after this lockdown period, will hinder the nation’s economic recovery”.
He said many businesses relied on that revenue to survive.
“Retailers are wondering about the upcoming sale season, with supply chain backlogs potentially impacting Black Friday sales and the lead-up to Christmas.”
There were direct costs the business and consumer equally share — and someone ultimately needs to pay.
“There are also opportunity costs of lost sales where customers are prioritising not only price but also the speed of delivery times. The lead-up to Christmas is the biggest period for retailers that keep many running for the rest of the year, particularly during the quieter winter months.”
Retail NZ chief executive Greg Harford said freight costs had jumped by 200 to 300 per cent over the past 18 months and had put further pressure on margins.
A Retail Radar survey of its members suggested two-thirds expected their prices to go up by about 7.5 per cent over the next three months.
“Across the board, there are delays getting product shipped and into the country, and the costs of both freight and the products themselves are increasing.”
Harford was urging customers to plan ahead for the Christmas and New Year purchases and be aware that there could be shortages.
“If customers can’t get exactly the products they are looking for, they could look for something similar, or talk to their retailer about back ordering it.”
There were delays with almost everything and retailers were doing their best to plug the gaps with alternative products or brands, and by air freighting goods in.
Rotorua Chamber of Commerce chief executive Bryce Heard said it was well aware of the stockout issues related to supply chain slowness and increased demand for some lines since the advent of Covid and lockdowns.
“Shipping and freight rates are notoriously volatile and for a country at the bottom of the Pacific Ocean this has potentially severe ramifications.”
Burnard International Tauranga branch manager Kevin Woledge said shipping lines had consolidated over past years and realigned their services, which led to shortages of space on their vessels.
Covid caused factory closures and importers struggled for stock but there has been unprecedented demand since the bounce back, which has continued globally.
Woledge said the charter price of vessels has doubled with rates expected to hold this year. “Trying to balance service versus price options for our customers where rates are extremely high and options are limited.”
All import and export services were experiencing some form of delay.
“Asia and particularly Southeast Asia there are significant delays at the large transhipment ports. Services across the US and Europe have all been reduced to avoid lengthy vessel delays. Port rotation and cancellations are commonplace further adding to increased transit times.”
Plumbing World chief executive Robb Kidd said in his view shipping companies were directing some of their ships to bigger countries like America or Europe where they could