Escalating conflict in the Middle East is expected to drive price increases across a wide range of goods for Australian consumers, with fertiliser supply disruptions and soaring freight costs threatening to push up the price of food, pharmaceuticals and online retail purchases.
The article highlights that the Middle East produces around 45 per cent of the world's fertiliser supply, meaning disruptions to exports are likely to affect global agricultural inputs and ultimately flow through to higher prices for products such as bread and beer.
Freight disruptions are also rapidly increasing international transport costs, with shipping companies introducing new conflict and war-risk surcharges ranging from about US$2,000 per container to US$4,000 for refrigerated containers.
Freight & Trade Alliance General Manager – Freight Policy & Operations Tom Jensen warned that the impact is already being felt across global logistics networks.
"It's likely going to get way more expensive for consumers doing online shopping from places such as Europe," Jensen said.
He also raised concerns about how quickly surcharges are being applied by carriers.
"It's more of a fair call if these surcharges only applied to new bookings, but shipping lines are applying it to containers already in transit, so costs have gone up pretty much immediately."
The report notes that more than 150 vessels are currently anchored to avoid potential attack, while insurance cover has been withdrawn for some voyages due to war risks, further increasing the cost of international trade.
Read the full article HERE.
