EU retailers order early to avoid Christmas crash

This article was originally published in English

The European retailers They try to avoid terrorist attacks to brighten up the day. Christmas to consumers. But as a result, German and British buyers could be left without items of fashion and electronics.

Retailers are concerned that unless they order early, the crucial Christmas shopping season could be ruined by the terrorist attacks in the Red Sea.

A wave of terrorist attacks against international maritime transport by the Houthi rebels of Yemensupporters of Hamas, has effectively closed the Red Sea routes to commercial shipping. Combined with price volatility in the shipping sector, which has led to a sharp rise in transport prices, retailers They face a double pressure.

To take advantage of the Christmas period, companies have no choice but to try to ship products with in advancein order to avoid further price increases that could be passed on to consumers.

Retailers race to avoid a nightmare before Christmas

Avoid the Red Sea conflict zone, one of the busiest shipping routes of the world that annually represents between 12 and 15% of world tradeit is not an easy task.

Container ships from the powerful manufacturing regions of Southeast Asia that supply European markets have to go around South Africa’s Cape of Good Hope, which adds 3,500 nautical miles (12 days) at the time of transport and millions of dollars in additional costs for businesses.

Supply chain advisors Drewry’s World Container Index (WCI) 2024 recorded a 270% increase in shipping costs of containers in the ten months since Hamas’ attack on Israel and the start of the war in Gaza and the wider Middle East crisis.

In August 2023, a container cost 1,389 dollars (1,249.20 euros); that price had been shotin August 2024, at $5,182 (€4,660.43).

German and British consumers more vulnerable to price increases

Patrick Lepperhoff of international supply chain management company INVERTO told Euronews Business that while all major importing economies in Europe are likely to feel the effects of the Red Sea disruption, Germany and the United Kingdom are especially vulnerable.

“Countries that are heavily dependent on imported goodssuch as Germany and the United Kingdom, will be particularly affected. These economies are highly dependent on the fluidity of global trade flowsand disruption could lead to increased shipping costs and delays, impacting product pricing and availability, especially in sectors such as electronicsthe fashion and the consumer goods.

“The prolonged impact of the interruptions in it Red Sea is having repercussions in the supply chains. Normally, summer is a quiet time for shipping and storage. However, the shipping sector is currently particularly busy, as the complex process of supplying stores for the key Christmas period is brought forward by two months,” says Lepperhoff.

“This puts pressure on retailers, who receive more stock ahead of time, for which they do not have space in their warehouses. Instead, retailers are retailers They will have to look for a store of booking in the short term, which can be very costly,” he added.

Could buyers benefit from advance sales?

Lepperhoff was quick to dismiss the idea that retailers’ need for extra warehouse space to accommodate early Christmas stock could benefit consumers through advance sales.

According to what he told ‘Euronews Business’, the prices in stores could increase“Retailers are likely to turn to third-party logistics providers (3PLs) to create additional warehouse space, as well as to increase utilization of their existing warehouse facilities.

“However, this entails some added costswhich could be translated into a increase of the prices of between 1% and 3%. While sales will continue to develop normally, the extent to which retailers can absorb the additional costs remains uncertain, and some of this cost could be passed on to consumers through higher prices.