Price rises likely due to UK shipping problems
The COVID-19 pandemic, along with Brexit, is hitting the UK import industry hard. Many UK-based importers are facing rapidly increasing costs that may persist even when the pandemic subsides.
Sky-rocketing Costs of Importing Freight Into the UK
Carriers have been charging a premium for all deliveries to the UK in order to lower the demand from British importers. This has significantly hiked up costs of delivering products into the country, with prices increasing up to 50% in some cases. Recently, it was reported that a shipping line charged $8,450 to send a 40ft container from China to the Netherlands while charging $12,050 to send the same container from China to the UK. The price was 50% higher just because the destination was the UK. In fact, imports to the UK from Asia have increased fourfold since last November. Currently, a 40ft container costs around $10,000 to ship from Asia to the UK, representing a record high. Moreover, importers across the UK have also been facing rising costs of shipping containers into the country in recent months. Unfortunately, experts predict that this may not be temporary, and UK importers may face the challenges of rising costs for months to come.
Covid-19 Coupled with Brexit Exacerbates Shipping Problems
The soaring costs of importing goods mean that customers may soon be forced to pay the price. Companies will not be able to stay in business due to increased overheads if they do not pass on some of the burdens onto the consumers. This may have a significant impact on consumer behavior, which, in turn, will force UK businesses to operate differently, which may cause even further challenges.
In addition, UK importers are facing congestion charges for goods imported into the ports of Felixstowe and Southampton due to delays that have been occurring since October. Because of the COVID-19 pandemic, governments worldwide had to enforce lockdowns and restrictions to curb the spread of the virus. As these restrictions were lifted, the industry saw a surge in demand which resulted in bottlenecks at UK ports and severe delays. This was further aggravated by another surge of orders that occurred during the holiday season on top of businesses stocking up due to the uncertainty of Brexit’s impacts.