Uncharted waters for Irish imports due to effect of global pandemic

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*Despite a significant delay in Asia shipments now likely impacting Christmas shopping, Woodland Group Ireland report 85% shipping success rate compared to the average market rate of 60% 

Freight forwarding and supply chain company Woodland Group Ireland, has reported steep price hikes and acute delays for Irish businesses shipping from Asia.

Since October 2020, shipping rates out of Asia have seen a 450% increase. The main source of the surge is due to demand far exceeding capacity, with the industry experiencing reduced vessel, routing, and equipment availability.

The situation has been exacerbated by an array of factors: originally set off by outbreak of Covid19 causing cancelled sailings and containers wrongly positioned in US and Europe. The situation was further impacted by the Suez Canal blockage and severe congestion to Southern China ports due to renewed Covid-19 outbreaks. The effect has been significant, resulting in severe disruptions, causing widespread shipment delays with material shortages and great increases in cost as a result for global supply chains, Irish businesses, importers, exporters and has even reached the Irish end consumer.

Commenting on the situation Kevin Brady, Director of Global Business Development at the Woodland Group, said: “The situation is unprecedented. While we are proud that despite these challenges, we have successfully delivered an 85% success rate in FCL (Full Container Load) liftings compared to the average market rate of 50%-60% and have offered an alternative to FCL for customers through our weekly LCL (less than container load) offering, the impact on the industry and long-term effect is putting significant pressure on everyone importing from Asia and connected supply chains. There is no quick fix, and we can expect current rate levels to carry on through to at least CNY 2022, while monitoring the situation closely and finding the best possible solutions as we go.” 

Woodland Group Ireland is currently preparing a research paper on the impact on imported goods from Asia into Ireland. Feedback received so far from Irish clients across five main commodity groups reports a sharp increase in the cost of raw materials as well as a significant rise in shipping costs.

Example of such increases:

  • Bathroom/sanitary ware: 5-12% increase in raw material costs added to the increase in shipping costs resulting in overall cost increase of between 25-30% to the Irish importer
  • Outside furniture: 10-15% increase in raw material costs added to the increase in shipping costs resulting in overall cost increase of between 25-35% to the Irish importer
  • Lighting fixtures: 5-8% increase in raw material costs added to the increase in shipping costs resulting in overall cost increase of between 10-15% to the Irish importer
  • Tiles/stoneware: 5-10% increase in raw material costs added to the increase in shipping costs resulting in overall cost increase of between 25-30% to the Irish importer
  • Doors: 10-15% increase in raw material costs added to the increase in shipping costs resulting in overall cost increase of between 20-40% to the Irish importer

    Looking into the future, solutions are lacking, and concerns are increasing. Further outbreaks of COVID-19 remain a worry, with higher shipping costs, delays and a shortage of equipment expected. Unfortunately for customers, it is not anticipated that these issues will be resolved in the short-term.  Feedback from Woodland’s Asia teams is that the present situation could result in shortages ahead of Christmas and into the New Year (2022). Retailers purchase seasonal goods from China months in advance, however, the level of backlogs and disruptions will continue to impact importing capacity and thus availability of certain products as we near the holiday season.