Warning as container costs to double

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Businesses should brace for a 100 percent increase in container costs for the summer due to the Russia and Ukraine war.

Michael Hall, managing director of Bahamas Maritime Logistics Service (BMLS), told Tribune Business that supply chain issues outside of The Bahamas are not any better than earlier this year and he sees no letting up for the remainder of the year.

He said: “Obviously, there’s a shortage of containers all around the world and most of those containers are coming from China. So in a lot of the major ports, like in Panama, California and New York City, they have a big issue with getting the containers out and back to their origin ports.

“So with also the warring with Russia and Ukraine that has even compounded the supply chain issue, meaning there’s a lot of imports and exports of containers that are now seized and left at the port and can move because of the war, because a lot of major franchises stopping the imports and exports into Russia.”

As the noose tightens around Russia from Western countries with regard to trade sanctions for their invasion of the Ukraine, a lot of commodities such as fuel, wheat, crude oil and flour, are not making it to other countries.

Mr Hall said: “We haven’t really felt it yet because it is like a tidal wave or like a tsunami, because right now there is a lot of withdrawal and then when the wave comes back then you will start feeling it.

“The wave is probably going to hit us around summertime and around hurricane season then we will probably feel it.”

As a result, Mr Hall said: “The cost of containers in the means of the cost of freight and bunker oil and fuel, is going to be astronomical. We would probably see a rise in anywhere from 80 percent to 100 percent in containers, minimum. Because you have to remember now the container is a commodity itself and when you are now ordering supplies that are now on high demand because you are coming out of a pandemic and people weren’t ordering much so you had a back order because businesses were closing down and you didn’t need those supplies anymore. So now people are trying to find a way to offload those goods. You have a lot of that trying to unknot itself while you have a wave of new orders because the pandemic is over and people are trying to start new businesses and there is just not enough. It is now a supply and demand issue.”

The rising cost of fuel will have a big impact on the shipping community as well, Mr Hall said. “Bunker and fuel prices drive everything and if the container ships and the companies that ship the containers are experiencing high volume fuel prices, with part of that fuel increase not being fully felt yet and will be felt within three months’ time, when that fuel has gone up, it’s going to affect everything and we may have $10 gas per gallon by the summertime.”

Comments

JokeyJack says...

Of course this makes sense because all things on Earth come from Ukraine.

We learned that in 5th grade. Didn't we?

Posted 10 May 2022, 10:51 a.m. Suggest removal

bahamianson says...

Muddos, with all of this good news I might as well not jump.

Posted 10 May 2022, 11:49 a.m. Suggest removal

moncurcool says...

Wasn't the PM in the news the other day spewing hot air that he got ONE company to reduce their container rates? Where he he now?

Posted 10 May 2022, 1:20 p.m. Suggest removal

tribanon says...

LMAO

Posted 10 May 2022, 1:46 p.m. Suggest removal

moncurcool says...

Wasn't the PM in the news the other day spewing hot air that he got ONE company to reduce their container rates? Where is he now?

Posted 10 May 2022, 6:09 p.m. Suggest removal

John says...

YALL ain’t get it ay? All those countries and companies that lost millions and billions during the pandemic attempting to recoup their losses. Do you think they could fix the shipping problem if they really wanted to? Orr! So the war has caused the Russian ruble from being worth $1.00 to the US $ to now being worthless (1 cent). But Russia is still trading oil, vodka, seafood and other goods. So who is benefiting? Orr. . Just a few weeks ago a 2 pound bag of snow crab legs was $48 or $24. T use to be half of that. Today was n the food store the same 2 pound package costs $89.00 or $45 a pound. A 5 pound box o f l crab legs costs $198 or about $40 a pound. Who is benefiting?

Posted 10 May 2022, 8:49 p.m. Suggest removal

John says...

Crab legs, for whatever reason costs more than lobster. Pork chops has gone from $2.50 to $4.99 a pound and lamb chops is around $8.00

Posted 10 May 2022, 9:04 p.m. Suggest removal

JokeyJack says...

As long as fools keep buying them, the prices will keep going up. As long as yall keep flying on planes with masks they will keep "making" you fly on planes with masks.
I havent flown anywhere for 16 months now and it nay be another 16 months it seems.
If they say yall have to be naked to fly on plane, yall gah leave ya clothes wit security.

Posted 11 May 2022, 9:09 a.m. Suggest removal

The_Oracle says...

What the politicos of the world did not understand is that once the engine of the world was stopped (by them, for the Pandemic) they were not the ones able to restart it.
The productivity of people made the world what it was up to 2019, the politicians are responsible for what it is today. The effects are far from over.

Posted 11 May 2022, 10:02 a.m. Suggest removal

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