LOFA has reported another increase in freight rates being levied at the industry. The new FAK* rates from Asia to North Europe are now edging towards $20,000 per 40ft container, representing a 1566% increase in the space of 19 months.
These increased rates are set to have a major impact on importers, retailers and consumers. Retailers could face not being able to shift stock if the retail prices have to be increased due to the jump in these shipping costs. Importers will have to pay 16 times more for freight than last year.
Considering many of LOFA’s members have to bring in 50 plus containers in a season, the associations says this is a huge amount of extra funding they are having to generate.
2021 – 50 containers @ $20,000 per 40ft Container $1,000,000
2019 – 50 containers @ $1200 per 40ft Container $ 60,000
Extra funding $ 940,000
LOFA adds its members have tried to absorb these costs where they can, to assist their customers, but this will no longer be possible with such a massive increase.
In light of these ongoing difficulties, LOFA has lobbied the Department of International Trade, the Home Office, local government. It has also reported this price fixing by the larger freight firms to the Competition and Markets Authority; this report is now with the CMA legal team which is deliberating on a decision.