Barbadians are being urged to complete their Christmas shopping early, as the cost of goods is expected to increase sharply due to soaring freight rates.
Chairman of the Barbados Chamber of Commerce and Industry’s (BCCI) Revitalisation of Bridgetown Committee, Eddy Abed, advised that consumers should act quickly to avoid higher prices on commodities as retailers adjust to rising shipping costs.
Freight charges, which have fluctuated throughout the year, are on the rise again, driven in part by the approach of the holiday season, he said.
“The cost of freight has not come down,” the fabric store owner told Barbados TODAY. “At the start of the year, a 40-foot container was running for about US$5 000 [$10 000]. At the peak of this year, it was around US$12 000 [$24 000]. It went down and then it started to go back up because we are going into Christmas.
“It will affect bottom lines, it will affect the cost of goods. Going forward for Christmas, I can only warn that goods that stores already have in stock, take advantage because they have been priced at lower freight. The newer goods are going to be more expensive.”
Abed’s warning was echoed by BCCI President James Clarke, who pointed out that while the impact of increased shipping costs would vary depending on the value of the goods, consumers should expect price hikes on many products.
“Freight rates have increased significantly, but it depends on what percentage of the entire value of your shipment is freight,” Clarke said. “If you have a very high-value cargo, the additional increase will be there but may not be as noticeable. But if instead of being, say, 10 per cent of the value of the shipment, it is now 20 per cent or 25 per cent, then you’re going to find an increase for sure.
“That is a significant bite, and that gets passed onto the consumer. You have to pay duties on that, you have to pay VAT, and all of these things, so the knock-on effect can be quite significant.”
Global shipping costs have been affected by several factors, including the ongoing Israeli-Hamas conflict in the Middle East. Vessel owners have faced higher insurance premiums as the risk of cargo loss has increased significantly. In addition, trading routes have been affected as ships avoid high-tension areas, leading to longer journeys and higher fuel costs.
