S&P Global Platts data reveals freight rates on crucial global trade routes have ballooned seven-fold since this time last year. The ACCC has heard reports that global apparel giant Nike is now paying as much as $20,000 to ship a container of sneakers, rather than the typical $2,000, making it effectively unprofitable to sell some sneakers.
“Either consumers wear [those costs], or the importers or exporters,” Sims said. In the face of surging freight rates, smaller exporters are being priced out of the market entirely.
Consumers can start Christmas shopping now to help alleviate global shipping congestion, ACCC chair Rod Sims said. Credit:Jessica Hromas
Freight forwarding company Think Global Logistics CEO La Chang said delays had now become the norm, not the exception.
“We are all waiting for goods that are not weeks but months late,” he said. Despite the fivefold rise in costs, market competition restricts how much can be passed onto the consumer. “We are spending more money to move a shipment and making less in the process.”
Last-minute cancellations from shipping lines have also rendered express shipping or ‘priority surcharges’ meaningless, Chang added. “Consumers have never paid more [yet] being offered less than now.”
All these factors are colliding at a time when consumer appetite for online shopping has skyrocketed.
Mr Sims said warnings from retailers for Australians to start their Christmas shopping now were “absolutely legitimate” and urged shoppers to do so as it would help alleviate the inevitable seasonal rush.
“It’s actually going to help if people start trying to buy things early and spread the purchasing over a longer period of time.”
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