Australia is in an import/export crisis as it recovers from the recent pandemic. With international and national border closures and a surge in consumer demand for imports, Australian imported products have been impacted exponentially.
Factory closures worldwide due to COVID have delayed the manufacturing of goods for export/import. High online shopping demands coupled with limited availability are driving the cost to the consumer up during the lead-up to Christmas this year.
COVID has affected international container shipping arrivals, and increased pricing is predicted to soar well into next year. High docking fees and port congestion have caused massive delays with some ships waiting more than a week before they can berth and unload.
COVID delays have caused canceled or bypassed shipping schedules which in turn have had a big impact on delivery times to consumers. The infrastructure needed at Australian ports for containerised imports and exports has not been maintained to keep pace with the shipping industry. There are only around half the shipping lines coming into Australian ports than before the pandemic.
The delays go right down through the supply chain from manufacturing, shipping and exporting, to the trucks waiting hours to pick up containers, the containers lost in stacks of other containers, and so on. In the lead up to Christmas, consumer demand will drive up the price of imports and more shipping disruptions can be expected.
Another blow to shipped goods is the rise in the cost of paper pulp for packaging such as cartons and moulded supports and fillers. Corrugated cardboard cartons are the most used eCommerce packaging. Other packaging essentials such as tapes, pallet wraps, and strapping have also seen a huge rise in cost. Manufacturers who rely on cardboard packaging to protect products during shipping can’t absorb another hike in cost, so the price is passed on to the consumer.
For goods like electronics, appliances, and other household items, shoppers will be faced with low or zero stock for items with long wait times, up to months to receive purchases. If you are a manufacturer or retailer relying on those packaging items like stretch film, corrugated cardboard, tapes, and strapping you would have needed to order much earlier in the year to keep up with demand.
Christmas is looking a little frugal this year if you haven’t followed advice to get ahead of the freight delays and get your orders in by July and August. Even if you were diligent and ordered early, you could receive your package too late as long factory closures in the big manufacturing countries like Korea and China continue recovering and playing catch up.
Summary of factors causing prices to rise:
- Imbalance between supply and demand. Circulation of containers has dropped dramatically compared to pre-Covid.
- Global pandemic.
- Trucking and rail delays causing port congestion.