FREE TRADE deals become too expensive for British Companies causing a Brexit disaster
The word ‘Free Trade’ agreement outside of the EU has been used commonly by politicians over the last three years as Britain prepared for a parting of the ways with the EU.
With a NO DEAL Brexit highly likely as the deadline approaches and with Ministers no nearer an agreement, ‘Free Trade’ deals don’t appear to be the answer for British Companies and importers.
With tariff’s likely to shortly evolve on all imported products, especially in the scenario of a No deal between the UK and the EU, importing prices from countries outside the European Union has soared.
Prices have soared by a whopping 500% due to massive increases by one of the largest monopoly’s in the world – shipping rates.
The world’s largest shipping companies have taken full advantage of the current Brexit plight of the UK and all shipping lines have followed suit.
Just this week, British ministers were delighted to announce a new ‘Free Trade Agreement’ with Singapore as published by the Financial Times and many other media outlets.
Although what the Ministers have failed to inform the public, the shipping rate from Singapore has raised for importers from $1400 per 40 foot container to $9,500, that being just the freight rate, on top of this the importer has port charges and inland transport costs.
It’s not just Singapore that’s effected, it effects shipping globally to the UK shores from all ‘Free Trade’ pre Brexit signed agreements.
Prices have gone to the extreme to the point where manufacturers have pulled out of supplying the UK market all together.
In some instances, cargo being cheaper than the shipping rate, especially when it comes to manufacturing parts.
Frantically, UK wholesalers and suppliers are contacting their clients, hiking up their own supply prices, although many products will be deemed too expensive for the UK market.
An example of this came from UK importer Birlea as they contacted their retail chain of customers:
Dear Valued Customer,
First and foremost, on behalf of everyone at Birlea, we would like to thank you for being a loyal customer and continually supporting us.
You may be aware there has been major disruption within UK ports, container shipping, and container availability over the past few weeks. The result of this is that some operators have pulled away from supplying the UK altogether causing the remaining major operators to increase freight rates by around 500% with further increases imminent.
As well as increased container costs, we have also seen a rising cost in raw materials. We have done everything we possibly can to compensate for the increase to our cost of goods, but unfortunately, we cannot absorb this fully. We therefore have no option other than to increase our prices.
Whilst the shipping rates have raised a whopping 500%- market forces are suggesting another 150% is on the horizon.
Importer Martyn Haddington, told Global247news this morning from his Hong Kong office: “Due to Coronavirus, I had a container order held up from the factory, although by the time I got it loaded and shipped, the freight rate had increased 478% to be exact, the shipping cost was more than the cargo value, I lost several thousands of pounds on that just one container shipment”
“Politicians are fully aware of the scenario but due to Brexit, they are trying to keep this very quiet, they don’t want the public to know” he added.
“What it means, trading from these ‘Free Trade’ zones is far too expensive, with tariff’s looking likely on EU importation too within just a few weeks now, there’s going to be huge shortages of products across the UK in all sectors, whilst prices will also sky rocket”
“The biggest issue is, none of these products can be manufactured in the UK to supply current chains, we don’t have the industry any more”
“This hasn’t been thought out at all it appears by the government, in essence they have allowed the UK to be held to ransom by the worlds shipping companies”
European imports, whilst the UK has remained in the European market, has seen the free movement of trade, mainly by road hauliers, tariff free.
Now that’s about to change, the UK market on the high street is preparing for retail prices to explode, leaving the question, will anyone actually buy the products?
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