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Why shipping is so expensive and how it is affecting prices

Freight rates are determined by the type of good, the weight of the cargo, the mode of transport chosen, and the distance to the delivery destination. Shipping rates have skyrocketed in the last year and a half due to the pandemic.

The coronavirus emergence disrupted supply chains and trade channels all over the world. According to a report from the United Nations Conference on Trade and Development (UNCTAD), the increase in container freight rates could drive up global import price levels by 11% and consumer price levels by 1.5% in 2022 and 2023.

This price rise is expected to continue until shipping supply chain disruptions are unblocked.

What triggered the rise

As the world went into lockdown, consumers shifted to online and e-commerce channels and started spending their money on goods rather than services. The global eCommerce market expanded by 44% from 2019 to 2020.

There was (and still is) an unprecedented demand on supply chains which led to a huge surge in container rates.

The pandemic not only changed the consumption trend but also caused a global shipping container shortage, which is likely to last until 2022. While China (the largest exporter of goods) started reopening, North America and Europe were still facing restrictions delaying the return of millions of containers to Asia. Moreover, the Covid-19 outbreak reduced personnel working in ports.

We also owe to the pandemic and the rise of demand the shortage of raw materials. The world is short of everything and the prices of commodities are rising spectacularly.

The Raw Materials Price Index (RMPI) measures the prices of raw materials purchased by manufacturers operating in Canada. This index rose 4.8% month over month in October, following a 2.4% increase in September, and 38.4% year over year.

We offer a solution!

While we are all being affected by the global shipping shortage and raw material crisis, at Life in Green, we think about you. We work case by case to ensure the best customer care experience is given to all customers. We conduct a thorough assessment of each client’s unique needs and adjust prices accordingly. If that time comes, we will send a letter to each client and explain in detail the cause of the price rise. Nevertheless, we will take into deep consideration the relationship built with the client, the volume of the purchases, and the number of shipments per year before making any decision.

We have stock!

Our manufacturing facility in India enables us to maintain a constant flow of products at competitive prices. Also, the quality of the Indian raw materials is superior to that of Chinese raw materials.

We have a permanent stock of all our products in Georgia, Vancouver, and Montreal. Our warehouses’ strategic location allows us to meet all our customer’s orders.

We make a huge effort to find the most convenient prices. For that reason, we have a specialized team in charge of planning and optimizing logistics to offer the most competitive prices to our clients.

We strive to provide the best service at the best possible price and we will continue to do so.

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