Rising Ocean Freight Costs
Here at Cheungs we import from different countries for our offerings. Over the years we have seen costs move and adjust with the times, everything within reason. As with many things in 2020, these costs went a little crazy to say the least.
Alright, what's the damage?
Overseas shipping costs have effectively doubled within the last 8 months. This applies to any and every industry that imports goods from overseas whether it is a finished product, or general supplies. Every importer is feeling the pain right now.
What impact is this having?
In short, importers are trying to find solutions to mitigate the cascading increase in costs from shipping alone. Because of the lengthy summer lockdowns, businesses had put a hold on re-stocks and shipping which created a lull. Closer to the end of 2020, everyone rushed to get merchandise in to be available for the holidays. That rush had overloaded ports all over the Pacific Ocean including West Coast ports in the US and we are still feeling the effects right now.
After speaking with our shipping industry contacts, we expect these increases to continue to go up at least until the Summer. For many industries in the US this may mean a continued lack of inventory, cost increases and lengthened restock timelines as response options to the situation.
What do you recommend?
This situation will affect different industries in a variety of ways. We definitely recommend planning out re-orders for product, from any of your suppliers, further in advance. Especially for holiday specific needs such as Christmas, planning ahead this year will ensure inventory stability. In addition, if you utilize any supplies such as shipping or craft materials, we recommend double checking lead times and costs as the year progresses. Some of your vendors may import these items from overseas. Double checking with your suppliers as they navigate this shock price increase, especially leading up to peak holidays, will help keep you ready and flexible.
What about Cheungs?
Our current plan is to stay the course. We will not be raising costs in response to this situation. 2021 is going to be a very tight year as our communities trudge through the road of recovery, but any increase we make will negatively affect you, our retail partners. In addition, we will work hard to keep our items in stock and prepare holiday-specific pieces well in advance to meet your needs.
While we hope this situation will improve soon, the future is largely unknown. For the time being we will tighten our belts a little more and hang in there!
For many of you reading this, your experiences will vary. Some of you may be aware of this situation all too well while others may be hearing about these cost explosions for the first time. No matter which group you are in, I hope this information helps you have a more informed mindset to better tackle 2021.
Thank you all for your continued partnership and I hope you are able to take some time to relax and enjoy a cool beer!
Spencer Cheung II
P.S. Got a question or want to continue the conversation? Shoot us an email at firstname.lastname@example.org with your thoughts!