Shipping costs.

[Jameshow]

https://www.bbc.co.uk/news/business-59142910
5/800% increase in profits is just plane profiteering! It's not like they have shipped 5/8 times the number of goods or the fuel costs have gone up by that much!

 

[DBT85]

If you want a thing that badly you pay over the odds for it. There is a shortage of containers in part because so many are stuck on ships so of course the price of them has gone up.

 

[shed9]

There are multiple reasons for the costs and they are are all interlinked and compounded. It's not all profiteering, just a function of supply and demand linked to a global pandemic and those subtle connections threaded within it all.

Cheap goods and cheap freight was never going to remain sustainable anyhow.

 

[Jameshow]

There are multiple reasons for the costs and they are are all interlinked and compounded. It's not all profiteering, just a function of supply and demand linked to a global pandemic and those subtle connections threaded within it all.

Cheap goods and cheap freight was never going to remain sustainable anyhow.

But all those factors would have resulted in costs not profits.

We are talking about profits I.e profiteering!

Nothing subtle about companies taking advantage and charging the earth!

 

[Craig22]

Supply and demand. At the moment it is very clearly a sellers market - where demand outstrips supply - so prices increase.

We have the same problem buying hand tools (look at the hand planes section on Axminster) - the vast majority are out of stock; demand has very definitely outstripped supply. And cars - because of global supply chain issues with semiconductors it is difficult or impossible to buy new cars. So used car prices have doubled - a used car is after all a car that you can drive, rather than a new one which you can't.

In a year or so all this will be past, it will become a buyers market, prices will fall again, and shortages will ease.

Just the way of the world I'm afraid

 

[shed9]

But all those factors would have resulted in costs not profits.

We are talking about profits I.e profiteering!

Nothing subtle about companies taking advantage and charging the earth!

They are delivering relevant to the increased demand where that increased business equates to increased turnover and as such, increased pre-tax profit. You also need to factor in that they lost signifiant revenue during lockdown, the same set of circumstances that led to the demand increase when that lockdown lifted. If you level out their finances over the entire period in question they won't look like the profiteering thieves you perhaps think they are.

 

[DBT85]

They are delivering relevant to the increased demand where that increased business equates to increased turnover and as such, increased pre-tax profit. You also need to factor in that they lost signifiant revenue during lockdown, the same set of circumstances that led to the demand increase when that lockdown lifted. If you level out their finances over the entire period in question they won't look like the profiteering thieves you perhaps think they are.

They were indeed hit in 2019 but let a graphic tell a tale.

 

[Terry - Somerset]

The world is a free market economy with prices and costs driven by supply and demand.

Normally there is no spare capacity in the system - the simple reason that spare capacity costs money. This is also the case with (for instance) NHS and schools - if spare capacity emerges it is quickly filled with activity.

Covid has destabilised the market. Some companies will have made very high profits, others will have gone to the wall.

Shipping costs are typically a small part of total product costs - particularly with respect to higher value, lower unit volume items - eg: electronics, consumer durables, tools, clothing etc.

A 40ft container may hold 180 ovens, 800 hobs, or 2000 laptops. Previously a container from China cost ~$2000. Cost per unit is $1-10 for products selling for $300-1000. Even with much higher shipping costs, shipping is still a small part of total cost.

The question is "how long will it be before normal prices and service are resumed". Until then those who can profit, will!

 

[Mark Karacsonyi]

I really don’t know. The world turmoil has created some issues. Living in Budapest I have always had to source quality tools and consumables, bandsaw blades, router cutters etc, from within the EU. Now I am finding some sundry items, are cheaper to ship from the UK, which also includes shipping costs and taxes. One needs to shop around.

 

[Distinterior]

..... Now I am finding some sundry items, are cheaper to ship from the UK, which also includes shipping costs and taxes. One needs to shop around.

That surprises me a little Mark ....Would you care to give us some examples of what you are sourcing from the UK that are cheaper than their EU equivalent...??

 

[Mark Karacsonyi]

Router cutters, from Axminster. Recently a 4m x 100mm dust extraction hose. Admittedly, I could have sourced the hose here. It was the cuffs that sealed the deal, to the crazy prices over here. Most Veritas tools are cheaper in the U.K., as opposed to German, Austrian and Dutch outlets. Bandsaw blades too. This is a cost vs. quality thing. I could add some others. I tend to use Yandles and Axminster tools mainly. One needs to take into account, the customs tax levy. However that now applies to any goods coming from China. The thresholds are now removed. Overall the prices in Europe have gone up. Russia remains competitive I don’t trust them though due to some bad dealings.