The tea industry is affected by the disruption of shipping. The price of tea goes up because the price of a container is hard to find.
The average freight from East Asia to the east coast of North America is $20695. On Oct. 15, the average price of tea at a West Coast destination was $17377, making it more expensive to load and transport a 40-foot container of tea from Vietnam than it carries. According to the Freightos Shipping Index, container freight from northern Europe to the east coast of the United States is $7200, and a recent 20-foot container from India to Argentina is quoted at $6900. In October, containers from Calcutta to Rotterdam cost $9500. Add in the price of limited labor to load Covid-19 and the cost of transportation from the ground to the port, and the cost is easily close to $20, 000. According to Freightos FBX, the average container price was $10396 on October 15th. The Shanghai container freight index rose 464%, with an average cost of $4614 per container. Sea-Intelligence, a Danish logistics data research institute, reported that delays accounted for nearly 13 per cent of global freight capacity. According to the company, time reliability hit an all-time low of 33.6% in August, which means a 2/3 delay in delivery. Air transportation is the preferred way to transport specialty tea. Under normal circumstances, the cost of using a parcel service increases by about $6.50 per pound of tea, or about 40 cents an ounce. But in recent months, fares on some routes have doubled and doubled again. The price of cargo from Frankfurt to Hong Kong has risen 2.2-fold in the past three months to an all-time high of $3.53 per kilogram, according to the new Freightos Aviation Index, which competes with the TAC index. The Freightos WebCargo platform monitors the cargo volume of 30 major airlines and the prices of 10000 freight forwarders, which together account for 40 per cent of global air cargo.
FedEx (FedEx) increased by an average of 5.9%, UPS (UPS) by 4.9% and DHL Express (DHL) by 5.9% from January 1. Retailers that usually offer "free delivery" services raise their minimum orders to $50 and $75, and many charge $15 to $25 for packages weighing less than 500 grams (1 pound). During the outbreak, 1/3 of airlines' revenue came from freight (up from 12% before the outbreak). "retailers may need to rethink the entire 'free delivery' service they offer to customers," Cathy Roberson, head of research and consulting firm Logistics Trends & Insights LLC, told the Wall Street Journal. "it will eventually have to flow to consumers because shippers-such as retailers, manufacturers, wholesalers, etc.-cannot continue to absorb higher costs. They have to be passed on in some form. " Us imports increased by 5 per cent in September compared with 2020, prompting the Biden administration to require u.s. ports to operate 24 hours a day, seven days a week, to reduce congestion. The problem exists at every container-optimized port nationwide, but the worst are Los Angeles and long Beach, which account for 1/3 of U. S. container imports, transporting 950000 containers in August. There were 86 ships idle waiting for berths in Los Angeles and long Beach this week, down from 97 at the end of September, according to Marketplace.org. Although 15000 trucks enter and leave Port Savannah, Georgia every day, 4500 containers remain on the dock three weeks later, the New York Times reported. In China, there were 242 ships waiting to be unloaded at the end of September. Frequent power outages and labor concerns have reduced port capacity in Ningbo and Yantian, and tea from Vietnam has been disrupted by the COVID-19 epidemic. Ports around the world are piling up containers because of a serious shortage of containers in China. The crisis is expected to last until 2022.
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