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Exposed: Shipping Company Raking In Billions As Retailers Suffer

Shipping Companies are raking in billions by forcing Australian and global CE and appliance suppliers to pay thousands more for a single shipping container.

Moller-Maersk a Danish shipping Company who operate in and out of Australia has seen revenues climb 55% during the past year.

A leading Japanese appliance brand who are a major supplier to Harvey Norman was told last week, that the price of a container from Thailand to Australia had risen to $10,500. Previously the same container was $3,500.

Maersk the world’s second-largest container shipping line by capacity said revenues had risen 55 per cent to A$94bn last year, with earnings before interest, tax, depreciation, and amortisation tripling to a record A$33bn.

“It’s record-breaking in every dimension,” chief executive Soren Skou told journalists in London overnight.

Maersk said it expected supply chain problems to persist into the second quarter but that “a normalisation [should] occur early in the second half of the year” and added that it was targeting ebitda of $34bn again in 2022.

On their Australian web site, the Company claims that ‘Due to the COVID-19 lockdown, it has become necessary to alter supply chain processes. At Maersk, we’re doing everything that we can to provide agile solutions that support the supply chain during these times of uncertainty in the global marketplace’.

Maersk claim that they are offering a convenient container transport & storage solution to provide additional flexibility in challenging times.

Some observers claim that shipping Companies are “price gouging” and that several Countries will “Suffer Inflation problems” due to the actions of shipping Companies.

The Danish shipping Company claim that they expect global supply chain woes to ease in the second half of this year.

The shipping Company has delivered a seven-fold increase in its dividend as a result of “price gouging by shipping Companies” said one retailer.

Skou said he expected a “normalisation of the situation” and a fall in freight rates as Covid restrictions are lifted and infection rates fall, leading to a likely easing of congestion in ports.

“It’s fair to say that we don’t have much experience of coming out of a pandemic. Exactly how it will play out is hard to say,” Skou said. “We see the first quarter in line with 2021 and the second quarter is very strong.”

“We continue to have the combination of very high demand and less supply,” he added, pointing to waits of three to four weeks to enter ports.

He said that 70 per cent of its shipping business this year was expected to be from long-term contracts, reducing volatility, Skou said.

Skou told the Financial Times in London that retailers needed “an omnichannel supply chain” where they were able to move goods from distribution centres to their stores as well as from fulfilment centres directly to customers. “We want to be able to offer both [and] sell products to move goods from the factory in China to the consumer,” he added.

A visit to several retail stores by ChannelNews this week revealed that stock is in short supply and that several retailers have moved to stacking empty boxes on shelves to hide the shortage of stock.

Another problem facing retailers is that several brands have moved to sell the limited stock they have directly via their own web sites.

Apple Dyson, and Sony are just some of the brands who restricting stock availability to retailers while growing their online sales. Apple is also supplying their own shops with stock at the expense of retail partners.

 

 



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