MANUFACTURING is slow, some countries have no truck drivers, and clearing at ports is constantly delayed.
These are some of the reasons why the price of basic goods is perpetually on the increase – mercilessly slapping consumers with high prices.
It appears this trajectory is not going to subside soon, which means local factories, retailers, and logistics companies would have to rethink certain business models and best practices to bring about recovery in the short and long run.
To those expecting corporate and personal gifts, Santa may be late or absent this year.
This is according to analysts at Simonis Storm Securities, contained in their recently released supply chain report.
The main gist of the report is that despite Namibia being a small player in the global economy, global supply chain constraints have also impacted local operations.
Simonis Storm analysts recently conducted a survey which found that imports, mainly from China, have seen delays of four weeks on average in the automotive industry.
With shipments coming in from Europe, companies now have containers eight weeks in advance, compared to two weeks in pre-pandemic times.
The availability of stock at overseas’ suppliers is another challenge, with some suppliers having increased the lead time from one month to between five and six months.
As if this is not daunting enough, the shipping cost of a standard 12-metre container from Shanghai to Walvis Bay has increased from N$20 385 to N$92 761 between August 2020 and October 2021.
The over 355% increase in shipping costs in just over a year excludes fees such as maritime insurance and customs duties.
Other retailers, such as those who deal in finished machines and power tools necessary for a service country like Namibia, are also having a hard time.
The retailers indicated that a container which would normally take six weeks to arrive from Australia, now takes up to 18 weeks.
Containers from Germany which used to take a month, now take three months, while solar containers which normally took two months from China, now take five months.
This puts cash flows under pressure due to having to pay for goods in full before they arrive.
According to the report, the country remains vulnerable to conditions in global factories and supply chains, especially since Namibia does not manufacture most of its locally consumed goods or equipment.
“These vulnerabilities have exposed weaknesses in our economy’s productive capabilities and a lack of diversification of sources of economic growth,” the report reads.
Delays in shipping time and costs have affected many players in the supply chain, including highway importers, dealers in camping equipment, renewable energy products, and household products among others.
Also, lower growth projected for manufacturing sectors across the globe would likely add to stock delays and rising prices for consumers in 2022.
Therefore, consumers should expect heightened levels of inflation, Simonis warns.
Email: [email protected]
Twitter: @Lasarus_A
Source: