The boss of a multimillion-pound online furniture company has warned of a "perfect storm" over supply chains after some shipping costs soared to five times their normal amount.
Asad Shamim, CEO of Bolton -based Furniture in Fashion, said the price increases to ship large containers from mainland China have come about in the course of a few months.
He previously paid around $2,000 for a container, but he has now been told that price has increased to $10,000 - five times as much as he was paying only a few months ago.
The price hikes, which are also evident across Europe and other parts of the world, have been caused in part by disruption from the coronavirus pandemic, which has shifted production schedules and demand while playing havoc with factory supply chains.
Mr Shamim said he has never seen such expensive shipping rates and warned the price hikes would inevitably have to be passed on to UK consumers.
He said: “This is a perfect storm of Covid, the ongoing Brexit/EU transition and congestion within UK ports.
“The rates for shipping have never been this high and I blame the UK government for its handling over the coronavirus pandemic and Brexit.
“There is already significant disruption to the supply chain and I don’t see this changing.
“The UK ports are significantly congested, there’s no confidence in UK trade thanks to Brexit and the transport issues near to Christmas are not helping.”
Furniture in Fashion is the region’s largest online furniture retailer selling everything from sofas, beds, dining tables to TV units from its 60,000 sq ft warehouse at Stone Hill Business Park, Farnworth.
The retailer sells contemporary furniture directly to consumers as well as developers and city centre offices.
Mr Shamim said: “Ultimately businesses like ours are going to be impacted.
“The price hikes and delays in shipping mean consumers will have to pay higher prices.”
The British Retail Consortium (BRC) and the Food and Drink Federation (FDF) have written to Lilian Greenwood MP, Chair of the Commons Transport Select Committee, and Angus Brendan MacNeil MP, Chair of the Commons International Trade Committee, to request an urgent inquiry into the ongoing disruption at UK ports and across the shipping market.
The letter points to the significant impact that disruption is having on shipping-related costs, noting that “container spot rates have jumped considerably – in one instance, by 170% from this time last year. Others have noted week-on-week cost rises of 25%. In addition, congestion charges are being levied by carriers for imports into Felixstowe and Southampton".
Helen Dickinson OBE, CEO of the BRC, said: “The lead-up to Christmas is the most important time of year for retailers.
“After a tremendously challenging 2020, many firms’ cashflows are under severe pressure, and so businesses are in no position to absorb these additional shipping costs.
“As a result, consumers will pay the final price. Christmas orders could be delayed, and retailers might be left with no option but to increase product prices.”
