Deprived of international holidays and socialisation during the global pandemic lockdowns, many consumers have turned to spending their disposable income on tangible products for entertainment and necessity. As worldwide Covid-19 cases also continued to increase, the demand for personal protective equipment (PPE) has outpaced supply and prices have increased dramatically.
In our previous blog 4 Major Factors Causing Glove Price Increases, we looked at what was influencing this cost increase, but another significant factor that is coming to the foreground is the logistical challenges of shipping PPE globally.
Behind the scenes, the supply chain is trying to keep up with this surge in consumer and PPE demand, while adapting to new circumstances and restrictions. The latest situation in the Suez Canal is a great example of this. With demand not looking to slow down anytime soon, a number of challenges have been created, impacting the availability and price of products shipped from overseas, including PPE.
Lockdowns in factories and nations producing goods has affected production and economic movements. With factories closed and shipping vessel numbers reduced, this has led to empty containers not being picked up.
However, with China recovering quicker than expected, factories were able to export global products in high demand. As these containers are not returned in sufficient time, this is causing empty container pile ups at ports. “Blank Sailings” are needed to return these empties, at a high cost to shipping lines.
Therefore, export containers are in low supply, and high demand, with the price of sea freight increasing considerably, sometimes up 230% year on year, depending on the route. In some cases, these costs are passed onto the consumer.
Many ports have been affected by a reduced workforce due to Covid-19 within terminals. Workers have had to quarantine leaving terminals with limited staff and an increased number of ships arriving. Los Angeles and Long Beach Ports have been seeing up to 30 or more container ships at anchor due to these staffing issues and increased demand; an average of 7.3 days, up 22%.
In New Zealand, Auckland Port has been unable to find skilled workers, such as crane operators, and with borders closed, this recruitment process has taken longer than usual. They have also been struggling to implement their automation project, which would create efficiencies in their port docking processes. This was again due to these border closures, alongside technical delays and numerous lockdowns. Maersk, the world's biggest container shipping line, recently withdrew 50% of their Auckland Port services. This had been cited due to the 10-11 day delay in birthing windows, with ships waiting at anchor for this period. Sitting at anchor can cost shipping lines a considerable amount of money, which is passed onto the importer through a “congestion” charge, and subsequently to the end consumer through a price increase - often alongside a large delay in the receival of products.
The culmination of these many factors are the reasons there has been a dramatic increase in cost of imported goods throughout 2020. With prices likely to increase into 2021, forecasting and purchasing may prove to be challenging.
The latest holdups in the Suez Canal is a prime example of the unpredictability facing the supply chain industry. With this canal accounting for 30% of the world’s daily shipping container freight, the sudden six-day halt of all ship movements around the area has created congestion for some European Ports and affect shipping line schedules and businesses inventory levels globally. For some, this may unfortunately come in the form of increased freight costs.
Amid market demands, Eagle has maintained supply due to established and trusted supply chain partners; partners who have maintained quota of product to Eagle, despite being able to easily sell the allocations at possibly even higher prices in other markets. Eagle has also prioritised supply to our customers first and foremost.
Sourcing our range of disposable gloves and clothing provides assurance to your business, protecting your staff, your brand and your reputation. Talk to our experts today, who are ready to help you select the best PPE for your business and guide you through the realistic shipping timeframes.