Shipping costs are up by more than 200 to 300 percent and the global supply-chain bottlenecks that are driving the increase are likely to continue well into next year, 25-year veteran Custom Broker Delroy Fairweather told The Reporter this week.
Fairweather explained that the congestion in ports across the world have translated into significant price increases for consumers. Prior to the pandemic, the cost of shipping a regular container into Belize would cost around US$4,000; however, due to the current circumstances, the prices in some cases have tripled and even quadrupled and is now ranging between US$15,000 to US$16,000.
“I will be honest with you,” Fairweather said, “I think for the whole of 2022 it is going to be like this. I don’t really foresee any changes before the ending of next year.”
The customer broker underscored the fact that there are more than half a million containers backed up just sitting on these [shipping] vessels around the world waiting to be offloaded. This is also connected to the shortage of containers and drivers in the US, and the fact that almost 80,000 drivers are needed.
“Some of the measures that they are implementing now are trying to deter people from ordering more stuff when their shelves are already stocked,” added Fairweather.
The increasing shipping costs will undoubtedly impact consumers, a point that Fairweather said he can certainly sympathize with.
“I know people are feeling the pinch because we always would want certain things and now it is getting out of a lot of people’s reach because of the actual cost. … A lot of this cost, which is caused by external factors, is being passed down to customers. … I have been in this job for 25 years, and I know how things work and now looking at the cost to import items, that has significantly skyrocketed to 200 to 300 percent. That translates to consumers because no company is in the business of losing money. They will try to make a profit,” lamented Fairweather.
But even with the Christmas season fast approaching and an expected increase in the demand for goods across the world, Fairweather said that he doesn’t forecast it to be a “blue” Christmas for Belizeans. He explained that Belizeans are usually known to do their Christmas orders and shopping ahead of time and have even found innovative and creative ways to bring the Christmas spirit into their homes despite the setbacks. He referred to last year’s Christmas, which he claimed had even more restrictions in place than this year but went fairly well for a lot of people, who either had to substitute products or simply do without. The ongoing bottleneck in ports across the world was caused by the response to the COVID-19 pandemic, which led to the closure of factories in China and elsewhere across the world and stalling the majority of the supply side of global shipping. This led to people being sent home, which in turn translated into a surge in demand for goods as people started to order food, electronics, and gadgets to facilitate working from home. This upsurge in demand caused an imbalance between supply and demand and now as the worldwide economy struggles to recover, it did so faster than expected and there is now a shortage of containers, equipment, and even workers to get the goods to their designated location. This phenomenon, in turn, is driving up prices to a record high and possibly leading to a growing shortage of food and materials in several parts of the world.
Fairweather explained that while some shipping routes that are used to get goods into Belize are not clogged (such as the route from Miami to Belize), there are others such as the South America route which would usually takes six weeks to get the goods into Belize, but now there is a three-month waiting period. In the Port of Los Angeles, which accounts for more than 40% of containers entering the US from China, and Europe there are hundreds of vessels with over half a million containers waiting to be offloaded. When those items are offloaded and sent to stores in the US then they would be bought and shipped into Belize.
“What happened is that most of the containers that are coming out of the far east such as China and Europe, and those places, yes we do have some delays with those. Now we are also finding out that vessels coming from South American countries like Brazil and those different areas that we would trade with are using the transshipment port in Jamaica. Jamaica is one of our main transshipment points but because of the shortages of vessels. The problem we are facing now is that we do have a feeder vessel that comes to Belize on a weekly basis. However, because of the size of that vessel, it would have usually brought 200 to 300 containers on a weekly basis. Now, this vessel can only accommodate 150 containers. Normally, the vessel is overbooked because there is so much cargo that is being transported into that transshipment point.”
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