Being in the logistics industry gives us a huge insight into the additional costs that importers and businesses must account for to form their sell price.

In September 2021, we wrote to the then Transport Secretary, Mr Grant Shapps, with our fears of the never-ending rate increases on ocean freight, asking for the government to step in. As we all know, it really did get totally out of control. It was for us ‘non-experts’, inevitable as a country that predominantly imports, that the extreme hikes in ocean freight were going to have a real adverse effect on inflation and cost of living. Why would it not?

The price of shipping a container increased 10x the pre-pandemic rates, and the increases all happened within the space of 10 months. So clearly, this was going to impact the end customer with overinflated purchase prices.

We were then staggered, on the 30th September 2022, to receive an invite to a meeting with a representative from the British Embassy and Bank of England in Beijing. Their first question in the meeting was, “Do you think that shipping prices will impact inflation”. Excuse me! Does a bear s*** in the woods? Maybe it’s just us (again far from experts), but surely it is obvious? Does the cost of trade not directly impact inflation etc? Yet the damage that was done during this time is still not acknowledged.

Now what surprises us even more now, is that after a spike that lasted around 16 months, ocean rates have now sat lower than pre-pandemic for around 6 months or more. So why have we not seen a dramatic decrease in inflation, which remains so high, driving up interest rates?

Over to the brainy people to answer this, or maybe even an explanation from the powers that be?

#jagufs #logisitcs #oceanfreight #costofliving #inflation #interestrates