Increasing pressures on the global supply chain are expected to bring added burdens for retailers, drive up prices, reduce availability and impact Bermuda buyers through Christmas, experts are warning.

Supply chain issues have been in train for 18 months, but new factors are making the problem considerably worse – including new covid restrictions and a crew shortage for large supply ships out of Asia.

There is also incredible demand from consumers and increased purchasing, which is expected to accelerate. That demand will pressure prices higher, as traders and importers compete for fewer manufacturing, shipping and cargo resources, analysts say.

Price increases are expected to be borne by the end user.

For an island almost wholly dependent on imports, an interruption in the westward flow of goods from Asia, together with price adjustments northward, could mean serious consequences.

Already, Bermudian buyers are being urged to pay attention.

Sharon Fenn, specialty run & fitness retailer, Sportseller, has used online channels to signal to her customer base.

“Some of the world’s biggest footwear and garment companies are seeing production pinched,” she has told them, “as factories in Southeast Asia struggle to keep the lights on, amid one of the world’s deadliest Covid-19 resurgences.”

She was adamant that those who anticipate the need for retail purchases at her location, should order early: “I need to stress, do not get desperate for footwear. It may take from four weeks to several months for us to fulfil any special orders and I fear our pre-orders, that were placed several months ago, may not be filled at all."

Near Seattle, Washington on the Puget Sound, a number of large container ships are left anchored offshore. Over extended periods, they wait for a chance to get into port. It’s a consequence of a surge in demand for imports from East Asia, leading to a record high US trade deficit.

Cargo ship delays have been the norm this summer all along the US west coast, where an unprecedented traffic jam has caused a state of chaos never seen before. Some of the ships waited off the shore for weeks. Many of them are mega-container ships with the carrying capacity of 10,000 containers.

But even when the ships get to port, there are further problems.

Reuters reported two weeks ago: “Events have conspired to drive global supply chains towards breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists.

“The Delta variant of the coronavirus has devastated parts of Asia and prompted many nations to cut off land access for sailors. That's left captains unable to rotate weary crews and about 100,000 seafarers stranded at sea beyond their stints, in a flashback to 2020 and the height of lockdowns.”

Some 90 per cent of the world's trade is transported by sea. The secretary general of the International Chamber of Shipping Guy Platten told the news organisation: "This is a perilous moment for global supply chains."

Other problems from the pandemic include slowdowns in warehouses, distribution centres, railroads, and other places where precision is needed to accommodate the movement of freight from the ships and through ports to their next destination.

The pile-up of freight on some docks is incredible. Many say it is longstanding issues of the supply chain exacerbated by the pandemic and the voracious appetite of the consumer. It also means ships are slow to return to Asia for more cargo.

The Oregon non-profit news organisation OPB reported this week: “With so much shipping capacity bogged down, importers and exporters have been competing for scarce containers and vessels and bidding up the price of shipping.”

The cost of shipping a container from China/East Asia to the West Coast has tripled since 2019, according to the Freightos Baltic Index. Many large importers are just beginning to see significant rate increases in the new rounds of negotiation for annual contracts.

Says OPB: “Rising shipping costs and delays are starving the economy of the stuff it needs and contributing to shortages and inflation. It's not just consumers and retailers that are affected.

“American exporters are complaining that shipping companies are so desperate to get containers back to China quickly that they're making the return trip across the Pacific without waiting to fill up containers with American-made products. That's bad news for those exporters – and for America's ballooning trade deficit.”

In other cases, empty containers are being left stranded in America. Ships can’t always wait for them. That has meant fewer on the other side for Chinese exporters.

The South China Morning Post last month reported: “The Ningbo Containerized Freight Index, which reflects the fluctuation of freight rates of international containers departing from the Ningbo Port, quoted a 77 per cent price increase during the week ending July 16, compared with mid-May, before the Yantian shutdown.”

Shenzhen’s Yantian International Container Terminal was shut for three weeks to mid-June, trapping a massive backlog of appliances, commodities and toys due for export.

It is such holdups that will continue to affect the retail supply chain. Some analysts believe Christmas shipments could be affected by the massive backlogs.

Says Ms Fenn, “The Delta variant in Asian countries has taken a very deep hold to the point where factories are being shut again. We thought we were out of this, and then they have had to shut down again.

“Factories are closing for long periods. But when they are producing, there is a problem with the ports, with shipping, or containers.

“There have been so many problems in the various steps involved in getting a product from manufacturer to the consumer. If one step is compromised, all succeeding steps are compromised.

“We are ordering all the time – seven to nine months in advance so they have time to create the products closer to the point of delivery. So, we’ve already ordered for the summer of next year.

“One major brand advised us last October that because of the pandemic, no orders would be filled for the 2020 Christmas holiday – orders we had placed in January/February.

“We had to choose from what they had available at that time. We had to pick up whatever we could. I’ve been in this business for 30 years and we had never had that problem before. I’m hoping that doesn’t happen again this year.

“I was at one point unpacking three different orders, purchases for which had been placed six to eight weeks apart – three shipments arriving at the same time.”

Meanwhile, Bermuda-based Triton International Ltd, the world’s largest lessor of intermodal freight containers, reported a fortnight ago that trade volumes and container demand continued to be exceptionally strong in the second quarter.

The company said it has purchased more than $3.4 billion of new containers for delivery in 2021, most of which have already been committed to high value, long duration leases.

Triton’s chief executive Brian Sondey said: “We continue to see incremental demand for containers due to operational disruptions that are slowing our customers' container turn-times.”

He added: “The very large block of new containers on attractively priced long-term leases and extended lease durations for our container fleet will provide strong foundations to our profitability and cashflow for years to come.”

Another Bermuda-registered lessor of intermodal containers – also one of the largest worldwide – has also been taking advantage of market conditions.

Textainer Group Holdings Limited has placed additional orders for more than $600 million of containers for delivery during the third quarter.