Recently, the United Nations Conference on Trade and Development (UNCTAD) released the "2021 Maritime Review". According to the report, the recovery of the global economy is threatened by high freight rates, and this status quo will be maintained in the next few months.
If the current soaring container freight rate does not fall back next year, the cost of furniture next year is expected to rise by more than 10% globally, and it is expected that by 2023, the global import price level may rise by 11%, and the consumer price level may rise. 1.5%.
According to the report, continued high transportation costs have affected the global supply chain, and companies with large commodities such as furniture are more susceptible to these price increases.
The report pointed out that Europe has been facing a shortage of large consumer goods such as imported household items from Asia. A practitioner in the furniture industry in the United Kingdom said: "If it is a large piece of furniture, it means you can't load a lot of things in a container, which will have a significant impact on the CIF price of the goods."
Most furniture is a low value-added item, and the production process is usually carried out in a low-wage economy far from the main consumer market. This means that more furniture products need to be shipped to the main consumer markets through containers, which makes the furniture industry highly dependent on shipping, and the high cost of shipping by sea will hit the furniture industry accordingly.
In response, the United Nations Conference on Trade and Development urged countries to consider a series of measures covering infrastructure and services. Among them, improving the quality of port infrastructure will reduce the world's average maritime transportation cost by 4.1%, while through better trade facilitation measures, the cost will be reduced by 3.7%, and by improving the connectivity of liner shipping, it will be reduced by 4.4%.
In addition, in the medium and long term, the shipping supply capacity will also be affected by the industry’s transition to zero-carbon shipping. To ensure that necessary investments in ships, ports, and new fuel supplies will not be delayed, companies in various countries (including the furniture industry) must rely on a predictable global regulatory framework.
