BUSINESS NEWS
Rising costs and lack of stock availability hits allied businesses By Matt Ross The impact of the COVID-19 pandemic has, and will continue, to be felt across the horticulture industry in a myriad of ways. Whether it’s the increased public demand for greenlife borne out of lengthy lockdowns, a desire to connect with nature and beautify homes and gardens, or the toll it’s taken on a diminished seasonal workforce and loss of employees through mandated vaccinations. But there is another concerning outcome that is having severe ramifications on one sector of our industry, that needs to be raised. Our allied businesses are being hit hard by astronomical rises in stock and shipping costs, as well as an unparalleled shortage in stock availability. And those factors could ultimately impact growers and retailers across the state. We caught up with three of our Industry Partners to understand how they have been impacted by rising stock and freight costs, and stock availability.
Shipping Costs The Drewry world container index shows shipping costs have increased by around 400% over the last 12 months. We spoke to one allied business that reported an increase from $2,500 to $12,000 to ship a for a 40-foot container.
Product Cost There have been significant price increases for many key inputs that are used to manufacture finished products for our industry (both domestically and internationally). One business we spoke
Port Congestion: Supply chain disruptions increase global congestion rates Anchorage
Total ships
Waiting ships
In port
Congest (%)
Net change
Shanghai/Ningbo/Zhoushan
269
68
77
46.9%
-4.9%
Hong Kong/Shenzhen/PRD
237
88
62
58.7%
+15.5%
Los Angeles/Long Beach
112
35
29
54.7%
+1.2%
Singapore
81
34
38
47.2%
+10.6%
Rotterdam
58
3
34
8.1%
-11.3%
Busan
53
6
31
16.2%
-1.7%
Qingdao
53
9
28
24.3%
+0.3%
Jebel Ali/Dubai/Sharjah
40
3
26
10.3%
-6.3%
Bangkok/Laem Chabang
39
3
22
12.0%
-10.7%
Savannah
35
24
4
85.7%
+10.7%
Antwerp/Zebrugge
33
0
22
0.0%
-23.1%
Surabaya
31
8
5
61.5%
+11.5%
Sources: Bloomberg, IHS Markit, Genscape Note: Congestion % estimated as anchored container ships waiting divided by sum of anchored container ships and container ships in port. Total container ships provided above include all vessels in anchorage area to show all activity. Net change shows current congestion minus April-Oct. median.
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GROUNDSWELL FEBRUARY 2022
