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What are the options? At the time of writing, the third largest port in the world, Yantian in China, is operating at less than full capacity due to a Covid outbreak. Ships are now left waiting to dock, tying up both the ship and precious equipment. Box recovery could take up to a month. Other ports
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point. We filled our warehouse when China was shutting down in early 2020, leaving us sitting on massive amounts of stock for the entire length of the first Irish lockdown when furniture retail was closed up. Thankfully, this went a small part of the way to meet the demand when retail reopened – but, faced with rising shipping costs at the end of 2020, we reset our pricing structure for all new stock. Throughout the first half of 2021, we kept our prices static for our customers even as shipping prices skyrocketed, reducing our margins. The record shipping prices have forced us to reset our pricing once again, as many of our industry peers have.
are seeing congestion as a result of vessels omitting Yantian by choosing alternative routes. The equipment issue is only getting worse, and we don’t expect it to stabilise this side of the new year. We are in for turbulent times in the
FIGHTING THE PRICE WAR With shipping prices continuing to go through the roof, industry veteran Robert Bianchi wonders if it’s time to explore new directions – without rocking the boat, of course … After more than 30 years in the industry, I decided the time was right to leave the protective bubble of the family business in order to head out and explore some new (and hopefully exciting) opportunities. As an interested observer, rather than at the coalface, I have been closely following (with growing incredulity) the spiralling costs of shipping from the Far East. Coupled with extended lead times and successive Covid outbreaks, it’s proving to be a perfect storm for furniture retailers and wholesalers importing from Asia.
For many of us, as buyers the Far East represented the end of the rainbow – access to prices previously unheard of (along with improved quality and more aspirational designs) was the hook, and relatively cheap and easy logistics the icing on the cake. This third part is now proving worrisome, and the speed at which the shipping prices are accelerating is astounding. Prices of $17,000 are regularly spoken about – if, of course, you can get a shipment date – whereas at this point last year the prices were at a steady $2000, with ready availability. With the Christmas rush just around the corner, I believe the worst is yet to come – and that paying $20,000 for a box will not come as a surprise to many.
WITH THE CHRISTMAS RUSH JUST AROUND THE CORNER, I BELIEVE THE WORST IS YET TO COME
medium term, and can expect the cost of goods to continue rising. As I said at the start, everyone in our industry is facing a choice – but do any of us really have a choice when it comes to stocking our storerooms and keeping our doors open?
By ROBERT BIANCHI So, what to do? In a word, nothing. The prices – particularly for dining furniture – still outstrip what’s on offer in Europe, and restocking bestselling lines with other ranges sourced from different factories can bring other problems into play, particularly when you combine this with the ongoing travel restrictions due to Covid. It is the firm belief amongst the logistics industry that although the $2000 container of 2019/20 might be a long shot, the prices will soften going into 2022. If it were me, I would be absorbing the increases, ensuring any price rises are kept to a minimum and, in so doing, keeping the supply chain moving. More importantly, I’d be working hard to ensure customers aren’t let down – trying to do anything new right now would effectively be shutting the stable door after the horse has bolted. In addition, I’d be investing my time in looking at sourcing from new factories in Europe – in so doing ensuring that I wouldn’t be over-reliant on any particular region or country for importing my goods in the future …
