Global shipping is in disarray as COVID-19, the Suez Canal crisis and a container shortage pose cascading problems.
Major brands like Mattel, Hasbro and Nike are warning of supply constraints going into the festive season, while, locally, JB Hi-Fi and Super Retail Group have also raised concerns, with JB Hi-Fi already stockpiling an extra $200 million worth of goods.
For shoppers, it means they will need to buy strategically this Christmas, the experts have warned.
Delivery delays of 16 days within Australia, price hikes
There are two “primary dangers” shoppers need to be conscious of when it comes to their Christmas list, Shippit founder Rob Hango-Zada told Yahoo Finance.
Once shoppers’ items are within Australia, they should expect delivery delays of up to 16 days, depending on what part of the country the item is coming from and the type of item.
This delay comes down to three factors:
- Australians stuck at home are doing significantly more online shopping, meaning Australia Post is dealing with Christmas-level delivery volumes nearly every day.
- Facilities used to process the huge number of parcels are ill-equipped for the tidal wave of deliveries. For example, bulkier items like furniture that require manual scanning and loading naturally takes longer than a package from The Iconic. The same goes for wine, which needs to be processed manually.
- Then there’s the workforce. Both stevedores and couriers engaged in rolling strikes over September and October, claiming poor pay and conditions.
FedEx, StarTrack and BevChain workers have all threatened to strike again on Thursday, citing poor job security and a growing percentage of outsourced workers.
“Based on performance, these companies should have been the first to provide job security guarantees and fair pay and conditions to reflect workers’ sacrifices and efforts during the pandemic,” Transport Workers Union national secretary Michael Kaine said in a statement.
“Instead, they have pushed workers to the brink with no choice but to pursue legal industrial action to break the impasse before the Christmas surge in demand.”
These delays can blow out significantly if shoppers are getting things from overseas.
Hango-Zada himself ordered some door knobs that would typically take around a week to be delivered. Now he’s facing a 12-week shipping delay.
“That sea freight linkage is letting us down and … the shipping cost to import items has skyrocketed… and that price will be baked into the price of the products that are being sold,” he said.
This is unlikely to affect domestic parcels dramatically, but international shipping will be passed along to consumers.
This “perfect storm” won’t subside until the end of next year, Logistics Bureau executive director Steven Thacker predicts. However, he believes claims that Christmas is in danger are slightly alarmist.
People should expect delays, but the delays will vary significantly based on what they’re ordering and where they’re ordering it from.
How this flows through to specific gifts will depend on the items themselves.
The same goes for shipping costs. Thacker said that while freight costs were up 200-300 per cent, that didn’t mean the actual item would go up that much in cost, as shipping was likely only a small part of the sale price.
For high-value items, this means the relative increase in price will be quite small. For low-value items, where shipping costs may have made up a higher percentage, consumers may notice a bigger price tag.
The bottom line: Once it’s gone, it’s gone
The major concern for consumers is that once retailers sell out of goods, there’s little chance of them restocking in time for late shoppers.
“You’re better off getting in now to shore up the items that you want to buy for Christmas, otherwise you might not even find them in stores,” Hango-Zada said.
Australian Retailers Association CEO Paul Zahra said online sales were up 36.2 per cent on 2020 figures, and this trend wasn’t likely to subside.
“This elevated level of online spending is likely to continue right through to Christmas and Australians should make plans to shop earlier this year,” Zahra said.
“Forty-eight per cent of Christmas shopping is set to be done online this year, so there’s unlikely to be a let-up in demand for products online.”
Hango-Zada’s advice to shoppers is simple: be smart and look at where you’re getting it from.
He suggests shoppers see if their preferred retailers have click-and-collect as an option when purchasing online: that implies that they likely have the item in store, and delivering it will be simple.
Shopping local means consumers can also cut a lot of the delivery pain simply by not looking for items that need to come by sea or air.
Finder has a round-up of major Australian retailers’ last shipping dates to ensure items are delivered by Christmas.
And be patient, Thacker added.
“Understand that it’s not you; it’s the whole world,” he said.
“Accept the fact that almost everything is going to take longer to get here, so plan well ahead.”