Import costs take another battering

NATIONAL: Australian fashion importers struggling to cope with current fuel surcharge levies could be hit with additional costs at the loading dock, logistics experts have warned.

The Australia/Asia Discussion Agreement, a forum of 14 ocean carriers servicing trade from north and east Asia to Australia, has proposed an increase in the general base rate of freight and a peak season surcharge from September 15. If both propositions are approved, increased rates would jump by a total of AU$698 (US$600) per 20 foot container.

Dean World Cargo managing director Bruce Haines said this would exceed most industry expectations for the financial year. He said international fuel prices had already seen air and sea carriers' fuel surcharge levies increase dramatically over the last twelve months, with the current surcharge sitting at over 50 per cent of the base freight rate for air and 200 per cent for sea.

"No matter what happens with, the oil price and the general freight rate are part of the total equation and add price pressure to importers' costs. Recent drops in oil prices have seen the airlines start to lower their surcharge, however as yet there has not been any movement on the ocean freight front.

"One would expect this component of the rate structure to fall back over the next few months, however the price of oil is very volatile and not always logical. As we head into the northern hemisphere winter, demand for oil will increase so conceivably prices could go even higher."

The move has prompted many of Australia's leading fashion retailers to introduce value-added services at origin to avoid excess handling costs in Australia. According to Dean World Cargo – which services national fashion chains Just Jeans, JeansWest, Sportsgirl, Jay Jays, Jacqui E, New Balance, Dotti, Suzanne Grae and Portmans – these new measures include ratio packing at factories and/or a forwarder's cargo freight station.

"This means that once goods arrive at destination, whole outer cartons can be immediately delivered direct to retail branch or client outlets," Haines said. "As the economy slows and fuel surcharge costs continue to put pressure on landed costs of fashion [we will continue to see] fashion retailers focusing on these kind of services." 

By Assia Benmedjdoub