Automotive shipping costs rising

Published on December 11th, 2021 | by Daniel Sherman Fernandez


Car Prices Going Up In 2022 Due To Higher Shipping Costs

Currently the rising shipping costs are being absorbed by car manufacturers in the country.

This is going to change in 2022 as logistic costs continue to rise and logistic bottlenecks keep happening in countries with lockdowns.

Plus, the movement of goods have risen due to higher labour costs as ship crews need added Covid-19 protection, testing and medical assistance.

Let not forget climate change issues which is forcing ship owners to spend more ensuring their engines are running cleaner to reduce emissions.

Currently, there is already a shortage of some imported goods from certain countries, food items from Australia and New Zealand for instance.

The automotive industry has parts issues, and we are not talking about computer chips, we are talking about local assembled models having to wait for certain assembly components that come from certain factories where Covid-19 has caused a production disruption.

All, these delays and waiting time costs money and so costs will go up and this is transferred back to the selling price of the car in the showroom. There are even some countries with fuel delivery issues and this pushes prices up.

Last month on the 18th of November AFP news reported that the United Nations warned on Thursday (Nov 18) that a surge in container freight rates could mean higher prices for consumers next year unless pandemic-fuelled problems are untangled.

The UN’s trade and development agency, known as the United Nations Conference on Trade and Development (Unctad), said global import price levels could increase by 11 per cent and consumer price levels by 1.5 per cent between now and 2023.

“Global consumer prices will rise significantly in the year ahead until shipping supply chain disruptions are unblocked and port constraints and terminal inefficiencies are tackled,” Unctad said in its Review of Maritime Transport 2021 report.

Global supply chains faced unprecedented demand from the second half of 2020 as consumers spent more on goods than on services during Covid-19 lockdowns.

BHP_Euro5 Diesel_2021_Lexus NX

But the upswing in demand hit several practical constraints, including container ship-carrying capacity, container shortages, labour shortages, congestion at ports and Covid-19 restrictions.

The mismatch led to record container freight rates “on practically all container trade routes”, according to the report.

“The current surge in freight rates will have a profound impact on trade and undermine socio-economic recovery, especially in developing countries, until maritime shipping operations return to normal,” said Ms Rebeca Grynspan, Unctad’s secretary-general.

“Returning to normal would entail investing in new solutions, including infrastructure, freight technology and digitalisation and trade facilitation measures,” she said.

Unctad said the pandemic had magnified pre-existing industry challenges, particularly labour shortages and infrastructure gaps.

It also exposed vulnerabilities, such as when China’s Yantian Port shut in May because of a coronavirus outbreak, causing significant delays, or when the giant container ship Ever Given blocked the Suez Canal in March, snarling global trade.

Still, the pandemic’s impact on maritime trade volumes last year was less severe than initially expected, Unctad said.

Maritime trade contracted by 3.8 percent to 10 billion tonnes in 2020, and is projected to increase by 4.3 percent in 2021.

Unctad said the medium-term outlook remained positive but was subject to “mounting risks and uncertainties”.

The agency predicted that annual growth will slow to 2.4 percent between 2022 and 2026, compared with 2.9 per cent over the past two decades.

“A lasting recovery… largely hinges on being able to mitigate the headwinds and on a worldwide vaccine roll-out,” said Ms Grynspan.

“The impacts of the Covid-19 crisis will hit small island developing states (SIDS) and least developed countries (LDCs) the hardest.”

The rise in consumer prices is expected to be 7.5 percent in SIDS and 2.2 percent in LDCs.

Tags: , , , , , ,

About the Author is a service to the public and other website owners. is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site While the information contained within the site is periodically updated, no guarantee is given that the information provided in this website is correct, complete, and up-to-date. is not responsible for the accuracy or content of information contained inside.

Comments are closed.

Back to Top ↑