Collapse of Hanjin Shipping leaves shipments stranded at sea and cost of shipping to and from Asia rocketing
Christmas might seem a little while off yet, but some parts of the cycling industry are already starting to worry about price increases and stock shortages over the festive season after the collapse of one of the world’s biggest shipping companies.
South Korean-based Hanjin Shipping filed for bankruptcy on Wednesday, and there is now considerable uncertainty over whether goods being carried from Asia to Europe and the USA on the company’s ships will reach shops.
The seventh biggest shipping company in the world, some of Hanjin’s ships have been seized in China while other ports have banned them from docking and refused to unloads containers for fear that they would not be paid.
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As a result, the costing of shipping from Asia to Europe and the USA has jumped by more than 50 per cent in the last week, potentially leading to price increases in the not too distant future, as bike, component, and clothing companies try to absorb the increased cost of shipping from their factories in the Far East.
In response to the news, the US National Retail Federation, the world’s largest retail trade association, said that “retailers’ main concern is that there is millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this. Some of it is sitting in Asia waiting to be loaded on ships, some is already aboard ships out on the ocean and some is sitting on U.S. docks waiting to be picked up.”
Potential price increases could come at what is already a bad time for UK cyclists and consumers in general, with some retailers already increasing prices by after the Brexit vote and with more price hikes potentially in the pipeline.