- Electronics, clothing, furniture could skyrocket next year due to the
cargocosts push companies to raise prices.
Prices for electronics, clothing and furniture could rise next year if supply chain costs remain high, according to a new UN report.
According to the United Nations Conference on Trade and Development (UNCTAD), the prices of these products could increase by more than 10% globally due to the increase
A disruption in the freight supply chain – caused by increased consumer demand since the end of 2020, combined with labor shortages – has created delays and congestion at seaports around the world whole. As companies scramble to find a place on a ship, they are forced to pay a high price for it.
Some companies are spending up to ten times more than they would before the pandemic to ship items across the ocean.
Companies that ship cheap and bulky goods, such as furniture or toys, are more vulnerable to these price increases, experts say. These items take up more space in the containers and have lower margins to absorb the rising costs.
Gary Grant, founder of UK toy store The Entertainer, previously told Bloomberg that in his 40 years in the industry he “never experienced such harsh pricing conditions.”
He said he had to stop selling some items, including giant teddy bears imported from China, because his company would have to double the price of buyers to compensate for the higher transportation costs.
“If it is bulky products, that means you cannot put a lot of it in the container and it will have a significant impact on the landed price of the goods,” he told Bloomberg.
UNCTAD Secretary-General Rebeca Grynspan said in a statement on Thursday that bringing shipping costs back to normal levels would require more investment in supply chain infrastructure to improve efficiency.