China-to-US container shipping cost hits record high in September
The cost of shipping containers between China and the United States hit an all-time high in September.
According to the Freightos Index, the median cost of shipping a standard rectangular metal container from China to the West Coast reached $ 20,586, nearly double what it cost in July, or double from what it cost in January.
CONSUMER SPENDING ACCELERATES AS THE FED’S INFLATION MEASURE REACHES A NEW HIGHER IN 30 YEARS
Rising shipping costs, combined with unprecedented supply chain challenges and high demand, have forced some companies to take matters into their own hands to ensure they have the products they need. in right time.
Last week, Costco said it would limit purchases of toilet paper, roll towels, Kirkland Signature water and high-demand cleaning products linked to an increase in coronavirus cases. Chief Financial Officer Richard Galanti estimated during the company’s fourth quarter earnings call that headline product price inflation is now between 3.5% and 4.5%, up from the previous quarter. The previous quarter’s estimate of 2.5% to 3.5%, and that Costco and its suppliers pay two to six times as much for containers and freight.
In addition to placing orders earlier, Galanti said Costco will charter three of its own container ships to move goods between Asia and North America. Each ship will carry around 800 to 1,000 containers at a time, and the company plans to make around 10 deliveries during 2022.
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Meanwhile, other companies are passing the burden of costs on to the consumer in the form of price increases.
Dollar Tree said on Wednesday it would offset rising costs by selling products priced above $ 1 at all of its Dollar Tree Plus stores. It will also test the additional prices in over 100 selected stores.
The company now expects its scheduled ocean carriers to meet only 60% to 65% of their commitments, down from previous forecasts of around 85%. It also cited a more than 20% increase in spot market rates for ocean freight from China since its first quarter earnings report in May.
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As businesses strive to mitigate costs and meet demand ahead of the holiday season, some experts are warning consumers to buy “hard-to-get” items as soon as possible.
“These delays are significant,” Freightwaves founder and CEO Craig Fuller told FOX Business. Maria bartiromo Friday. “I would recommend everyone to go ahead and buy these hard to find items now rather than wait for the holidays.”
Fuller expects toys, clothing and electronics to be the hardest items to find this year, and the supply chain may not normalize until 2023.
Inflation rose 4.3% last year, up slightly from the previous month and the highest in more than three decades. However, Federal Reserve Chairman Jerome Powell on Thursday expressed hope that supply chain problems could start to improve next year, potentially pushing inflation down in the first year. semester 2022.
Despite supply chain bottlenecks, consumer spending rose 0.8% in August, down from 0.1% in July and above the 0.6% increase expected by economists polled by Refinitiv.