Food prices increase with container congestion at ports and shipping delays

Consumers are starting to feel the sting of global shipping congestion, with the price of food beginning to rise.

Container and shipping infrastructure at Port Melbourne. Global shipping congestion could continue to affect the Australian agricultural supply chain in the coming weeks. Picture: Ellen Smith

Food prices and container costs have increased as global shipping delays continue to plague the agricultural supply chain.

Widespread congestion at ports worldwide are being driven by a multitude of factors, including Covid-19 supply chain issues and, closer to home, ongoing industrial action at key Australian ports.

ANZ food, beverage, and agribusiness insights Madeleine Swann said food prices were rising both domestically and internationally.

“Certain retail grocery prices have jumped strongly in recent months on the back of factors including a shortage of livestock, labour and shipping for imports,” Ms Swan said.

The retail price for fruit and vegetables has lifted more than 5 per cent in the past three months, due to ongoing Covid-19 labour shortages, and lack of international shipping capacity for imported fruit and vegetable products.

Shipping Australia policy and communications officer Jim Wilson said the average one day cost for a ship approximately 4000 twenty feet units was $42,000 in January.

That same ship – sans fuel – now costs about $140,500 a day.

“If you’re a farmer waiting on a delivery of equipment, you may not get it in time,” Mr Wilson said.

“Freight rates have markedly increased. Australia’s also had a really good growing season, and that puts more demand on containers.

“But there’s not a shortage of containers, or bookings … there is a surplus of demand and a big problem with congestion. It’s a congestion crisis.”

Mr Wilson said while it was impossible to predict what could happen if industrial action continues in Australia, in the past shipping companies have opted to alter services to work around disruptions or delays.

“It may be a change in frequency, it make skip a port call, or implement a surcharge. It’s increased costs, time, and delay,: Mr Wilson said.

“That affects everyone.”