rise this winter as retailers contend with skyrocketing shipping costs in addition to a national shortage of HGV drivers.
In the past 12 months, shipping costs have leapt by more than $10,000 (£7,500) per 40ft container, up from around $2,000 (£1,450) in some instances. Depending on the product, the cost of freight has become so great that it can exceed the value of the goods themselves.
The soaring cost is becoming a global issue and this is largely due to disruption caused by the coronavirus pandemic: labour shortages have resulted in port closures in China, leading to delays and price inflation.
Emile Naus, a partner at the consulting firm BearingPoint and formerly head of logistics strategy at Marks and Spencer commented that
“For years, the shipping industry has been very unprofitable. [The sector has] made up for that in the past year, I’m working with one retailer whose products are worth less than the freight. A lot of the containers are physically in the wrong place, I don’t think this will get fixed any time soon it will take a year, possibly longer. At that point, prices will start to come down.”
The pair, who import and sell power tools and DIY and garden equipment, have seen the business grow since the UK went into lockdown last year. Fred Evans, from Wolverhampton, runs a family business, Lumberjack Tools, with his brother.
Yet the “astronomical” shipping costs they are now paying has meant they are seeking £500,000 from the bank to stay afloat, and they have also been forced to raise prices.
This time last year, Mr Evans, 47, typically paid around…
