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Speaker 1: Before men to building in the Science which had one

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Speaker 1: with the update for you shortly from the States, here

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Speaker 1: we go again back home. We'll all a round the

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Speaker 1: world really bit. It affects us back home. Shipping costs

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Speaker 1: have seen a spike. They sit at triple what they

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Speaker 1: were at the end of last year. That of course

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Speaker 1: puts pressure on the plants have imported good which goods

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Speaker 1: which you guessed it means it fuels inflation. Now the

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Speaker 1: custom breakers and freight forward as Federation former president Chris

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Speaker 1: Edwards is with us on this. Chris, very good morning

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Speaker 1: to you.

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Speaker 2: Morning Mike.

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Speaker 1: What have we got at play here apart from the

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Speaker 1: Red Sea or is it the Red Sea? And is

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Speaker 1: it the Panama Canal or all of these things?

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Speaker 2: Part of that It reminds you when we were speaking

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Speaker 2: during the COVID crisis. We've got a global disruptor, which

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Speaker 2: is the Red Sea. We've got an American market that

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Speaker 2: once again is on the rise. During COVID they had

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Speaker 2: a sharp increase in consumer spending and that was global.

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Speaker 2: But this time the American market is a bit different

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Speaker 2: to hours and we're seeing a lot more volume go

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Speaker 2: through ports. That's causing congestion and inventry managers in the

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Speaker 2: States are concerned about potential strike action on the East

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Speaker 2: Coast Ladder in the years, they're ordering early. That's creating

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Speaker 2: a peak season as well. All of this crets unity

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Speaker 2: for the shipping companies to raise prices, and they've taken

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Speaker 2: the opportunity.

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Speaker 1: I don't know your expertise and geopolitical matters, but why

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Speaker 1: is the Red Sea still a thing? Why didn't they

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Speaker 1: work out that this is a problem and fix it,

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Speaker 1: nix it, shoot, somebody bomb, somebody get to Yemen.

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Speaker 2: Well, I think, yeah, it's what we've learned at the

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Speaker 2: last out of twelve months. Geopolitics takes a huge part

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Speaker 2: in the supply chain. So with the ships now going

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Speaker 2: via South Africa or under the Capus over it's a

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Speaker 2: lot longer journey. Now there's a lot more capacity in

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Speaker 2: the supply chain, and that we built a lot of

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Speaker 2: ships during COVID and that capacity is kind of needed

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Speaker 2: right now as we take a longer journey to get

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Speaker 2: to now case New Zealand. I think the schedule reliability

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Speaker 2: is thirty percent at the moment, so it's not great.

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Speaker 2: But once that Red Sea situation is fixed, when it

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Speaker 2: gets fixed, you can come back through the sewers canal

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Speaker 2: and a lot of those problems dissipate, and I suspect

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Speaker 2: with all these new vessels on online, capacity increases, demand

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Speaker 2: stantly lower and our part of the world downcome the crisis.

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Speaker 1: And then the other thing is you bring it offsetting.

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Speaker 1: This is the fact we're importing list because we're in

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Speaker 1: a cost of living crisis. Can they costs get pasted on?

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Speaker 1: Read the inflation re debate. If you bring something in

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Speaker 1: your paid more, can you then pass it on and

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Speaker 1: people aren't going to buy it anyway?

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Speaker 2: Well, Inflation is an interesting thing in the supply chain,

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Speaker 2: right because you've got the portabalk and putting their prices

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Speaker 2: up and seeing they're going to do their annually. Customs

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Speaker 2: are putting their fees up on the first of July

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Speaker 2: as well, and then you've got these ocean rate rises.

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Speaker 2: It's kind of hard to see how inflation gets under

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Speaker 2: control in the supply chain for the next sort of

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Speaker 2: six to eight months. I suspect, so passing costs on

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Speaker 2: with is not much demand, it's pretty difficult to do,

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Speaker 2: right if you're an importer.

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Speaker 1: Exactly good insight, Chris appreciated as always Chris Edwards, who's

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Speaker 1: the customer breakers for Right Porters, former Federation president.

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Speaker 2: For more from the Mic Asking Breakfast, listen live to

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Speaker 2: news talks.

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