Retailers brace for ‘catastrophic’ Christmas as import costs triple
David Whittle’s warehouse is so full that he can barely move around.
âEverything is waiting here, it’s a beautiful product and we just can’t sell it,â said the owner of Nirvana Eastern Imports.
Inside all the boxes are handmade Turkish housewares. They should now be on the shelves of Christmas shoppers, but in Auckland the stores are closed.
“What are we doing? We’re stuck,” he said
Stuck surrounded by $ 300,000 in stock, and that doesn’t include the high cost of getting it here.
âYou add to that the cost of freight, which used to cost $ 8,000 for a container, it’s now $ 24,000. It’s got to come from somewhere. Everything that gets paid, all of this product gets paid, we just can’t sell it right now, âsays Whittle.
Every New Zealand importer is paying through the roof just to get goods here.
Foot Science International in Canterbury imports foam to make orthotics. The freight debacle added up to $ 3 million to its annual cost of doing business.
“We have to pay premiums of up to 6 or 700 percent of our normal freight costs, well what I would have considered our normal freight costs,” said David Boyd, international director of Foot Science.
It sells most of its orthotics overseas in 65 countries, but the cost of shipping a container from Ashburton to San Francisco has dropped from $ 3,000 to $ 19,000 – a cost companies don’t no choice but to spit.
âIf you want to be in the game a year from now, you have to pay whatever it takes right now,â Boyd said.
Business owners don’t want to raise prices before Christmas, but say it’s inevitable.
âThese costs will be passed on at some point, no one can continue to absorb that kind of increase,â Boyd said.
“It’s out of our hands, it’s completely out of our hands,” Whittle adds.
Certainty too. Paying painful prices doesn’t even promise them a place on a ship or a cargo flight.
âRight now, we’re extremely worried about whether or not we’ll have the space we need each week to ship goods,â Boyd said.
To keep trade flowing throughout the pandemic, the government has subscribed to a two-year air freight program, costing $ 365 million. Importers and exporters are now asking that this same subsidy be applied to shipping.
âWhat would be helpful is if we could provide that same kind of assistance to ocean freight, which is obviously where the greatest volume of freight is,â Boyd said.
Transport Minister Michael Wood told Newshub he was reassured by international shipping companies that they had committed to serving New Zealand.
With Christmas looming and Auckland uncertain what it will look like, retailers are in shock.
âChristmas looks like a disaster and for us it’s going to be okay, but for a lot of other retailers it will be the end of the game. I’m sure,â says Whittle.
Not a game they want to play.