Ongoing difficulties with moving product from Asia, which has resulted in surging rate levels, has led to the importing of some low and mid-valued products becoming unviable.
A report by Sea-Intelligence has highlighted that some commodities, such as assembled furniture, are incurring freight and ancillary costs equating to over 60% of the product value.
The current rates are just not sustainable for many businesses previously moving products from Asia to the UK, Europe or USA, which will continue to impact consumers over the coming weeks and maybe months.
Credit terms are also becoming an issue, as we witness many more examples of carriers insisting on ‘up-front’ payments for freight charges. In the current market conditions, where orders can take upwards of 90 days to get from Asia into stores, a reduction in credit terms is something that importers of low value and low margin products can ill- afford.
Meanwhile, following the knock-on effects of Suez, the latest major obstacle to be impacting the market is port congestion in Southern China. The Port of Yantian was closed to exports for a period recently and other nearby ports are having similar difficulties. Coronavirus outbreaks in the region are believed to be currently reducing the output levels.
For further information on the above, please do not hesitate to contact a member of the Westbound team.
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