Freight costs are continuing to steadily rise as a result of some supply-chain bottlenecks that include a record number of container ships awaiting berths at ports globally and shows few signs of relaxing.
The volume of empty and full containers in the docks show a congestion that ports are striving to clear.
Increased shipping costs globally are adding onto growing concerns that inflation across the USA economy will be slow to dissipate, which ultimately will have a domino effect locally on Australian soil.
Verus Global is preparing for more pressure
“I have been carefully watching as this scenario is unfolding, for months now, with no solution in sight.”
“We need to identify that the market is a monopoly and we are at the mercy of shipping lines with their increasing appetite to remove the freight forwarder through automation and new service offerings.”
“The future of our industry is currently looking very bleak,” explains Meyer.
Verus Global is worried about food supply shortages
Even more concerning is the disrupting of global supply chains in the food sector. Countries like Japan, USA and UK are urging Chinese customs officials to pause the rollout of regulations on food imports.
Food inflation is increasingly becoming a concern globally.
Supply-chain snarls have sparked meat inflation in North America, with households about to eat their costliest Thanksgiving dinner ever, that is if households can even get their hands on a turkey.
As families tentatively plan to gather, shoppers can expect to pay more for meat and all the trimmings.
Frozen turkey prices are up approximately 20% year on year, an all-time high, according to the U.S. Department of Agriculture, while retail prices for pie-staples like milk and sugar are at multi-year highs.
In Japan, Kikkoman, a major food manufacturer, will raise the price (up to 10%) of soy sauce and soy milk in 2022, in response to the rise in prices of soybeans, rising raw material costs and logistic fees.
This will be the company’s first price hike since 2008.
Meyer recently offered commentary on the price of groceries set to increase amid supply chain issues and global container shortages locally, and does not doubt that meat inflation will hit Australia.
“The enormous backlog, congestion and scarce equipment means we can’t even get food into Australia.”
“The industry is scrambling for solutions to get their stock into Australia, but service suspensions, the restrictions around capacity and delays are increasing, making this near impossible,” said Meyer.