The average consumer whilst on their weekly shopping trip is not thinking about the shipping container crisis, and why would they when the supermarket shelves are packed to the rafters with stock.
But twice in recent memory a shortage of available stock has resulted in consumers bearing the brunt end of dramatic price rises, price scalpers, or just general unavailability of items. Early 2020, the Coronavirus epidemic left shelves bereft of hygiene products and toiletries due to a surge in sales and panic buying.
In March of this year the ‘Ever Given,’ a large cargo container ship, ran aground carrying 18,300 containers valued at $1billion for 7 days, affecting many if not all wholesale businesses in the UK and resulting in countless supply line issues globally with farther-reaching implications such as the 12% of global trade that passes through the Suez Canal each day being halted. The estimated cost to global trade of the Suez Canal being blocked was upwards of $9.6bn per day.
With so much global trade relying on shipping freights, containers, and their ability to reach their destination safely, in this article we discuss how the astronomical price rises on the cost of containers is undoubtedly going to be passed on to the UK consumer for the foreseeable future and more critically, for Christmas.
Manufacturers of artificial trees have effectively revealed they are struggling to attain the raw materials necessary to create their product. The CEO of Balsam Hill, an artificial tree manufacturer, has admitted that the price of artificial trees is set to rise in 2021 due to “paying as much as 300% more per shipping container this year“. The very real fear for companies such as this is that they will not be able to increase prices enough to cover the organization’s own expenses whilst remaining an attractive prospect to the consumer.
Worldwide the stress put on the supply chain by COVID 19 has seen retailers and wholesalers crippled due to the sudden increase in demand but a stark lack of production because of the many countries and their manufacturing business being restricted by the various lockdowns and the red tape that goes along with it.
Despite COVID-19 restrictions being relaxed, the pandemic is still causing disruptions, such as the sudden closure in early June of China’s Yantian container port, one of the world’s largest container ports. Despite progress made by China and other major trading countries in vaccination programmes – It will take time to create immunity, in consequence, interruptions and delays will remain a normality over the coming months. Congestion at ports is still wreaking havoc the world over and shipping performance has remained much the same as 2020 when lockdown first began in terms of vessels keeping to schedule. In terms of the punctuality of shipping container vessels, performance is at the lowest level in ten years of records.
The ever-increasing cost of shipping containers, the scheduling conflicts at ports globally and the lack of a cost-effective alternative to sea freight means that the consumer will see a huge increase in their Christmas spending this year. Toys, food goods and other Christmas merriments are likely to inflate in price, as products are fast becoming worth less than the freight cost of shipping.
Whilst Christmas may not be cancelled, it is highly likely that many consumers will pay more for fewer festivities. To put into perspective, prior to the pandemic, the average cost of importing a container from China to the British Isles was about £1,823.87. Now, that price rests at an astronomical £10,943 – An approximate increase of 500%. Humbug.
Most industry experts agree that freight prices will remain at an all-time high until well after this upcoming festive season. Such is the unexpected increase in shipping freight costs that many businesses in the UK are being forced to seek alternative finance just to stay afloat.
How We Can Help
Since the 2008 financial crisis, Capify has helped provide alternative finance to companies across the UK when they need it the most. We put the needs of our customers at the center of everything we do, so it’s vital to make our loans easy to use and easy access. Our online application only takes 60 seconds to complete, and at the end, you’ll find out if you’ve been conditionally approved!
Helping local businesses with Business Loans
Capify has been behind small and medium (SMEs) British businesses for over 13 years, helping retailers, restaurants, wholesalers, salons, manufacturers, construction, online businesses and other service businesses raise affordable, easy finance. Our friendly team is based in Altrincham, South Manchester, which is home to its very own award-winning independent high street.
Capify believes every business should be able to grow, expand, and make essential improvements. With flexible finance, you could refurbish your premises, invest in brand new equipment, splash out on award-winning staff training, run marketing campaigns or fill your shelves with shiny new stock. Whatever you need to do to, Capify can help you raise flexible, affordable funding to make it happen
How does the Capify Business Loan work?
We know that many businesses find it tough to afford large monthly repayments, and this can hold them back from raising crucial business finance. Instead, repayment of our loans is made via small daily or weekly repayments.
You can raise £5,000 to over £500,000 with Capify, then pay off the loan over 6 to 12 months. Whatever works best.
The benefits of a Business Loan from Capify
- Raise from £5,000
- Payback little and often
- No monthly lump sum
- Opportunity to raise more funds
- Get your funding within days of applying
To be eligible for a Business Loan, you’ll need to:
- Run a UK-based business as a limited company
- Process more than £10,000 a month through your business bank account
- Have at least 12 months’ trading records
If you’re a limited company that has been trading for over 12 months and has a turnover of £120,000+, apply online today to discover how much you qualify for: