In recent weeks, there’s been considerable discussion around the escalating import freight costs. As an importer of packaging and raw materials, this issue is particularly relevant to us. Many brands consider packaging a commodity product despite our efforts to design impactful solutions that help our clients boost their sales. However, it remains a crucial component of the overall product. Our raw materials are sourced globally and transformed at our local manufacturing plant on the Gold Coast. We provide packaging solutions for the pharmaceutical, food, supplement, and skincare industries.
Freight costs will rise significantly over the next six months before Christmas. Several key factors contribute to this trend:
1. USA Elections and Protectionist Policies: The upcoming USA elections, particularly if the Republicans win, could lead to increased protectionist policies. Chinese manufacturers are sending multiple containers and ships on the China-USA route to stockpile goods in America ahead of any potential tariffs. This surge in demand impacts the supply and demand dynamics for sea containers, directly affecting ocean freight costs.
2. Impact on China-Australia Routes: The high freight volume on the China-USA route also reduces the available supply for China-Australia routes. This situation results in rising charges and increased lead times for freight.
3. Manufacturing Shifts to South America: Companies like BYD are exploring manufacturing in South America, creating solid demand for freight from China. This development further intensifies the demand for sea containers in the short term.
For our Australian connections, we anticipate freight costs to rise significantly in the next 3 to 6 months, reaching levels reminiscent of the COVID years. We will continue to monitor the situation closely but recommend locking in pricing now with order placements to secure some price protection.
We expect these conditions to persist until after the Chinese New Year in 2025.
For more detailed insights and assistance, please reach out to our team today.