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Supply shortages could lead to price rises amid COVID shutdowns

Containers sit idle at the Port Botany container terminal in Sydney. Source: AAP

COVID shutdowns of major international ports are putting pressure on retailers to fill orders and keep shelves stocked. With international shipping costs steadily rising over the past 12 months, many suppliers are being forced to increase their own prices. However, major retailers in Australia are confident it won't impact consumers this Christmas.

Indya Foods is Australia's second-largest importer of Indian groceries, but the company is struggling to meet demand. The company's Murali says high shopping costs are bringing more problems.

"Of course the cost of it has gone up. Before, you know, the shipping containers which we used to pay 700 to 900 dollars, today we are paying up to nine thousand dollars. On top of that, locally, in Australia, the government doesn't have any control on the ports,  so ports keep increasing their prices. Before, you know, there was no certain charges but now for each container, we are paying additional costs of $250-300 in additional costs. They keep on increasing the prices."

He says backlog at ports is causing massive delays in stock hitting the shelf. 

"So normally your transit time from overseas, like if you take India as an example, you should get the containers back within 25 days. But because of these shipment conditions and delays in ships and everything, that is causing huge delay so sometimes this is going up to two, three months"

Bloomberg Transport and Logistics Analyst James Teo says breakdowns in global supply chains are causing chaos for retailers big and small.

"We have a perfect storm that were seeing the in shipping industry. We have COVID-19 restrictions causing port operations to be less efficient, workers being affected by all theses restrictions so ports are really not operating at maximum efficiency and at the same time we see some of these ports shut down completely because in China, there was a worker in a  port that was found to be infected by COVID and they had to shut down the terminal for a few weeks and the ripple effects are quite significant. Because if you're stuck at one port and you can't unload, it'll affect the rest of your schedule, if you're going to call on a series of ports."

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People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.

If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.

News and information is available in 63 languages at sbs.com.au/coronavirus

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