The Nassau Guardian - July, 7th, 2021 - Chester Robards
Rutherford-Ferguson: This will have an effect on the price of goods across all sectors.
Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Chairperson Khrystle Rutherford-Ferguson said impending inflation due to increased costs in global shipping are worrying and is creating a challenging environment for Chamber members.
Rutherford-Ferguson said some BCCEC members have reported ten-fold increases in shipping costs from certain countries based on the method of shipping. It is understood that while shipping costs into this region from the US has only increased marginally, imports from places like China and Japan have risen in cost by 300 percent in some cases.
“The cost of shipping has increased over the course of the pandemic,” Rutherford-Ferguson said. “Contributing to this issue is the COVID-19 status of the country at the time. Also contributing to this global issue is the fact that many suppliers have been operating at less than capacity, thus impacting the global supply chain.”
She said some BCCEC members have already been advised in writing by their suppliers of an “immediate” increase in wholesale and retail prices of goods and of their rise in costs for ocean freight. She said other members have lamented the cost increases for inland freight shipping within the US.
“The business community relies heavily on importing most of its goods from other countries, therefore the rising cost is worrisome,” said Rutherford-Ferguson.
“This will have an unavoidable inflationary effect on the price of goods across all sectors, as our members continue to do all they can to operate in this challenging environment.”
According to an article in trade news website Global Trade Review from last month, small and medium-sized businesses will suffer the hardest in the midst of these trade cost increases.
“A global imbalance of containers, port disruptions caused by COVID outbreaks and a still-wobbly supply demand curve as economies recover at differing rates are causing chaos in the shipping industry and small and medium enterprises are beginning to find themselves priced out of trade,” the article pointed out.
Senior economist at ING Joanna Konings said in the article: “SMEs only have one choice, which is just to pause those shipments that they can’t afford to ship. And if that pause lasts too long and they don’t get enough income, then they either have to cease exporting or restructure to serve a closer market.”