Urgent calls for fair pricing system as shipping crisis decimates landscaping industry as shipping giants’ profits soar – Reuters
Landscaping companies are calling on the government to step in and introduce a fair pricing system as the shipping crisis continues to create unprecedented transport costs and leaves companies on edge.
COVID-19 restrictions and Brexit trading conditions have caused a real storm in the shipping industry, with global prices rising by more than 400% in some cases.
Limitations on containers and restrictions on loading capacity have led to chronic supply chain delays and a desperate shortage of essential materials, and the British Appliances Association has reported cost increases of up to 300% since the start of 2020.
Major manufacturers and retailers in the industry are growing increasingly frustrated with the government’s lack of action on the issue, especially as major shipping carriers continue to rake in profits.
The expected profits accrued by the shipping industry for the year 2021 double the total amount of profits earned over the past two decades. By 2021, carrier EBIT (earnings before interest and taxes) had reached an astounding $200 billion. German shipping company Hapag-Lloyd raised its profit outlook in 2021 to USD 12-13 billion, while carrier ‘ONE’ – which dominates 6% of the shipping market – raised its profit for the year to 12 billions of dollars.
Alan Lovell, CEO of Bannister Hall, a leading supplier to the UK landscape industry, said it was “unacceptable” that the nine biggest container carriers had tripled their revenues since 2019 as small businesses were struggling, and has since called for the introduction of a fair pricing system. .
“It is definitely time for governments to stop sitting idly by and intervening in this economic crisis,” he said.
“It is a situation unquestionably caused by the skyrocketing prices of shipping companies. The implementation of a fair price control mechanism could bring global trade back to some degree of normality.
“While these carriers are posting record multi-billion profits, UK manufacturers and retailers should somehow absorb these artificially inflated costs during a pandemic.
“Absorbing increases of this magnitude in margins will inevitably cause consumers to feel the impact of such large price increases. »
Lovell said Bannister Hall’s import freight costs had risen “astronomically” over the past two years – with the price of transporting the same set of landscape supplies from China having risen 450% since January 2020 (2 £000 to £10,500).
“The goods themselves have only increased slightly, but the cost of transporting these supplies to the UK has become more expensive than the cost of buying them,” says Lovell.
“This situation highlights the lack of alternatives to maritime freight transport. For some businesses, shipping higher value products by air or rail might be a feasible alternative.
“However, the capacity of these methods is currently extremely limited for our needs and these costs are also increasing.”