Cost of Imported Goods Set to Rise in the UK

Published 2021년 5월 19일

The global shipping industry has been suffering through a crisis due to the effects of COVID-19. The UK has found itself deeply submerged in this situation, compounded by the impact of the UK’s exit from the European Union (EU). Those most affected by the crisis have been UK traders, who have witnessed freight costs rise by over 400%. UK consumers are set to experience a ripple effect as they will likely pay more for imported goods as British firms are being forced to pass on the rising costs.

The UK remains submerged in the global shipping crisis

Severe delays and rapidly rising rates have crippled the shipping industry leading to the implementation of congestion charges by import carriers at Felixstowe and Southampton ports. This also led to the UK’s logistics industry requesting help from the country’s Department of Transport. However, the UK Chamber of Shipping has reported that the country’s supply chains are resilient enough to manage the crisis.

*A container ship docked at Felixstowe port. (Source: Getty Images/BBC)*

The global shipping industry has been severely impacted by COVID-19, with lockdown restrictions causing shipment delays or cancellations. Despite the easing of regulations, the shipping industry is still suffering from a pile-up of empty containers and bottlenecks at major UK ports caused by rising demand for imported goods. The UK’s Brexit plan has increased the country’s shipping concerns, with goods being stocked up in anticipation of the exit.

Freight costs rise

The global freight crisis has heavily impacted British traders. Shipping costs have gone up at alarming rates, increasing by as much as 400%. Over and above the skyrocketing shipping fees, carriers are adding congestion charges for imports to the ports of Felixstowe and Southampton due to severe delays. The whole global container supply chain is out of balance, as different parts of the world went in and out of lockdown at different times.

To mitigate the costs, traders have decided to transfer part of the added costs to UK consumers. Based on reports from the Department of Environment, Food and Rural Affairs, the UK imports approximately 45% of the food consumed by British consumers, including fruit and vegetables, meat, and beverages. Therefore, food prices of primary consumer goods are set to go up in the coming months, as the cost of shipping continues to be passed down the supply chain.