Shipping costs surge to hit Samoan consumers

A surge in global shipping costs caused by the COVID-19 led economic downturn will soon hit Samoan consumers as the county's largest hardware store warns its customers to brace themselves for price rises. 

Analysis by the Japanese news and business intelligence company, Nikkei, has found that the cost of sending a consignment by sea from Asia to America has shot up by 250 per cent in the past year. These rises are only forecast to keep going. 

The global spike in prices is hitting Samoan businesses, with the country's largest hardware store, Bluebird Lumber and Hardware, informing customers they will face price increases connected to COVID-19's effect on the global economy.

The store's management made the effects of surging shipping costs on prices clear in a statement issued this week.


“The impact of the COVID-19 pandemic on world trade has taken a drastic turn in the last few months with more severe restrictions having an impact on production, shipping and [...] the price of goods,” read the statement.

“As a result, all major commodities that we offer are affected in terms of shortage of supply, delays in delivery and prices continuing to increase.

“As a company, we pride ourselves in offering our valued customers quality items at affordable prices and we will continue to do everything within our control to ensure we provide the best possible prices without compromising the quality of our goods we offer.”

The company's management said its own data analysis showed that the current freight costs of transporting goods to Samoa from North Asia via sea have doubled. 

“And it is anticipated that this will further worsen as we approach peak shipping season," the company said.

“Quotations will only be valid for 14 days as we cannot hold pricing longer than this.

“We apologise sincerely for the inconvenience that this will cause and thank you for your continued support and understanding.” 

The rise in shipping costs has been attributed to lock downs around the world which have led to surging consumer demand for buying goods online and having them shipped, instead of purchasing them in stores. 

Dubai based international shipping business Qafila said price rises reflected a total cut-down in global trade as well as increased demand for shipped products. 

“Business people are trying to figure the way out," the company said in a recent report.

“The current spike in the shipping rates is not coming down for at least a year. And as a result, the consumer would carry this burden. According to Bloomberg, The worldwide shipping rates have reached an unprecedented height.”

The company's analysis of global shipping costs showed considerable interruptions to multinational business' operations. 

“The global supply chains have never been this disrupted. That’s not a guess or mere assumption based on the current situation," its report read.   

“Alarming statistics suggest that businesses are struggling to deliver customer satisfaction and keep other stakeholders happy.   

“One can only imagine the devastating effects of those huge numbers.  

“It all resulted from a series of lockdowns that were imposed throughout the world as precautionary measures against COVID-19. 

“As a result of those lockdowns, many industries came to a halt, which, in turn, resulted in a lot of the shipments being called off in advance. This created massive problems for the carriers, brokers, and businesses alike.”

This week Australia's business watchdog, the Competition and Consumer Commission, said it would be investigating the sudden surge in prices to investigate whether companies were profiteering.

Last week, the spot price for a 40-foot import container from Shanghai in China to Rotterdam in The Netherlands, the world's most expensive shipping route, soared to $US14,287 ($19,405) per container according to the Drewry World Container Index. Compared to the year prior that is a rise of nearly 550 per cent, the Australian Broadcasting Corporation reported.

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