Was it 16 months ago when supply chains were being squeezed at both ends by the cost of container transport? In March of last year, global supply chains were reported to have seen unprecedented disruption, and container freight rates were at record highs. Remember the pandemic? This led to a boom in US containerised consumer goods demand, causing congestion, and reducing effective container logistics capacity. Anything that needed to be transported internationally was much more expensive because of the cost of getting it to another place.
How things change. Gobal production of shipping containers is now reported to have fallen significantly, as demand for goods sank following the easing of pandemic restrictions, leaving corrugated steel boxes piled up at major ports. There is a limit to how many of the things Lawrence Llewelyn-Bowen can turn into a napkin or a glamping opportunity, and Drewry - a maritime research consultancy - says that production of 20-foot equivalent units - apparently the industry’s standard size for a container - fell 71 per cent from 1.06 million to 306,000 between the first quarter of 2022 and the same period this year.
For those who jumped on the container bandwagon around 2021, thinking their fortune lay in multi-coloured steel boxes, there is only disappointment, as demand for exports has waned since restrictions eased and economies have reopened, leaving the shipping industry with a surplus of containers that threatens to overwhelm ports in China, where up to 95 per cent of the world’s boxes are produced.
Staying with supply chain issues, retailers are today (Thursday 25 May) said to be “losing” up to £31.5 billion in online sales each year because of delivery-related “frustrations” when customers come to pay, research by The Times shows. A report to be published later this week has found that 24.8 per cent of attempted online purchases are abandoned by shoppers because of poor delivery choices, high delivery fees and slow delivery speeds. Not, as was previously suspected, because they almost bought an item they never needed online and then woke up the next morning with that familair "what was I thinking?" feeling.
Richard Lim, chief executive at something as crushingly disappointing for his family as 'Retail Economics', said consumer expectations were “higher than ever before” and they showed “little tolerance” for brands unable to meet levels of delivery. Richard said (to the embarrassment of his kids): “It’s clear that with such a high proportion of online baskets being left abandoned at the point of checkout, retailers need to prioritise offering a range of delivery options to suit their customers’ needs if they are to win.”
We in the NTI newsroom blame Queen who famously sang, "We want it all, we want it all, we want it all; and we want it now."