Ongoing challenges with International Freight
As a local business that relies heavily on goods manufactured overseas, the congestion and price hikes with international freight over the last two years have hit hard. Global rates for 20 and 40 foot sea containers are still double the price of a year ago and prices are not looking likely to reduce in the near future. Rising fuel prices are putting further pressure on freight costs.
Soaring demand for physical goods thanks to government stimulus, coronavirus travel restrictions, more time at home and a global shortage of cargo containers has increased congestion and delays at the world’s ports and pushed up shipping costs.
The skills shortage in WA along with the ongoing impact of the pandemic (vaccine mandates and COVID cases) are not helping the situation either. We are now being impacted with additional delays in the transport of containers to and from the wharf. Skills shortages in specialist areas such as crane operators, forklift drivers and truck drivers are affecting the supply chain. COVID regulations are sending many people into isolation which is further exacerbating the issue. New staff may lack the experience required to handle many of these jobs efficiently.
This is creating additional penalties and fees for importers as freight has to sit in storage on the wharf while awaiting pickup. There can also be delays with getting empty containers back to the wharf.
Larger container ships arriving into Fremantle that are carrying almost double the usual amount of containers is also causing congestion as more vehicles and drivers are needed to unload the vessels at the one time.
As an importer, all of these factors are major causes for concern and can have big impacts on already slender margins. Predicting what the next few months and years may hold is very difficult and we rely on our expert freight brokers to secure the best services and rates available.
For our business, the best way to mitigate against some of these issues is to have orders in production as early as possible so we have options on how and when to ship goods. If we have a little more time available, we can then ensure containers are as full to the brim which then spreads the cost of freight across as many items as possible.