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Retailers hurry for Christmas stock amid escalating shipping costs

Katie Ross
03 June 2024

European retailers are placing Christmas stock orders early amid a surge in shipping costs and trade route disruption.

Houthi rebels, backing Hamas in its war against Israel, have been attacking Western vessels in the Red Sea, diverting routes and driving shipping prices up.

So far, the Houthis have attacked more than 50 ships in the Red Sea and Gulf of Aden, disrupting traditional trade routes and thus causing a surge in shipping costs.

Shipping costs have surged in recent weeks. Overall, the average cost of shipping a 40ft container now exceeds $4,000 (£3,100), a 140% increase from last year, according to freight market tracker Xeneta.

The current price for immediate delivery of goods has almost doubled in recent weeks from $4,500 to $7,500 (£3,500 to £5,900).

Container prices peaked in January then briefly declined, but have hiked again in recent weeks.

Nick Glynn, boss of the Buy It Direct Group, owns several online retailers including Appliances Direct and Laptops Direct, told the BBC his businesses were having to plan and book well in advance to ensure shipments arrived on time, mitigating the risk of key consumer dates including Black Friday and the Christmas period.

He said: “It impacts cash and warehouse space as suddenly you have to store the goods for longer. You can't risk ordering later."

"This makes a massive impact on big bulky items, especially those that have low margins such as furniture, barbecues, and kitchen appliances," Glynn told the BBC.

He added that there was "no way" most online retailers could absorb those price increases on big-ticket items.

"So unfortunately for consumers, the next few months will see significant rises on these big-ticket items," he concluded.

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