Federal Labor Appear To Be Happy With Appliance Price Rises. After Red Sea Terroist Attacks On Shipping
The Federal Labor Government appear to be quite happy with the notion of rising costs for both consumers, distributors, and retailers with their refusal to provide an Australian warship to protect shipping lanes under attack in the Red Sea with European appliance manufacturers set to be hit by the recent terrorist attacks on shipping lanes.
European appliance and consumer brands whose products are manufactured in Europe including the likes Miele, Electrolux, Beko, Loewe TV’s Bosch, and in the sound market, Audio Pro, Focal, and Devialet are facing significant cost over runs due to shipping Companies refusing to sail through the Red Sea with freight Companies now adding an addition 11,000 kilometres to a journey from European ports.
Australia has rejected a US request for a warship with Défense Minister Richard Marles saying the nation’s strategic focus had to remain on the Indo-Pacific.
The Government also indicated that Australia did not have the capability to protect their war ships from drone attacks despite the Australian Government funding Australian Company Drone Shield whose technology is being used in Ukraine to protect against drone attacks from highly sophisticated Russian drones.
The Company has already received multiple orders from the Australian Government as part of a multimillion-dollar military assistance package.
Oleg Vornik, DroneShield CEO, said recently ”Russian drone attacks on Ukraine have been a regular occurrence since the start of the war. DroneShield is pleased to be supplying our drone detection and defeat systems to Ukraine under this sovereign aid package.”
Overnight Ikea warned that the disruption to global trade caused by Yemeni rebel attacks in the Red Sea could delay its deliveries and affect availability of some products.
Already more than 100 container ships had been rerouted around southern Africa to avoid the area, a trip that adds about 11,112 nautical kilometres to a typical journey from Europe to Australia and potentially three or four weeks to product delivery times.
“This is going to be disastrous for retailers and suppliers as it could push up cost of goods significantly in particular appliances that are big and heavy and have to be sea freighted” said one executive from a major retailer.
“The situation in the Suez Canal will result in delays and may cause availability constraints for certain Ikea products,” the retailer said.
The problems will not affect deliveries before Christmas, which arrived more than a month ago, but could see significant price rises from February 2024 onwards.
Vespucci Maritime CEO Lars Jensen, told Loadster, that shippers could expect two-week delays to their goods arriving.
Portcast data shows rerouting via Africa would add seven days to South Asia-US sailings and 10 days to Asia-Europe sailings going via the Cape of Good Hope, and 15 days to Sydney and Melbourne, estimates suggest the extra transit and fuel costs will be north of $2m per vessel.
Despite the much lower tonnage being impacted than first thought, Mr Sand said it was clear the impact would still be sizeable.
“This is backed up by what many shippers and major retailers are saying – that they expect to see some of their products being unavailable in a few weeks as a result of these delays, and insufficient stocks to cover any shortfall,” he said.
“I think there are two other key points. Firstly, the issue is not going away any time soon. A taskforce has been set up to try and impede attacks, but it needs to find its way to work.
Several retailers said it was not yet clear yet how bad deliveries would be affected. There are fears that the problems could renew pressure on inflation in Australia a move that the Federal Labor Government appear to have ignored in the move to not supply a warship.