Dairy industry voices spiralling shipping cost concerns to EU

Dairy Industry Ireland (DII) has been in contact with the European Commission to highlight the impact that the coronavirus (Covid-19) has had on global shipping – with a shortage in shipping containers leading to drastic price increases of 100% and more.

Following the outbreak of Covid-19 in China earlier this year, global supply chains have been knocked out of kilter – including the transport methods.

Reports emerged in January and February of shipping containers queuing up in Chinese ports with backlogs in unloading these.

While these containers are now being unloaded in China, they are consequently missing in Europe and others elsewhere, causing disruptions in the chain.

This is especially important for dairy produce such as butter and cheese, which requires special refrigerated containers, making the option pool of containers even smaller.

As a result, industry is reporting dramatic price hikes of at least 100% in the costs of shipping at present.

Discussions

Commenting on this situation, DII director Conor Mulvihill told AgriLand that yesterday, Tuesday, March 17, his organisation held discussions with European Commissioner for Trade Phil Hogan, and the wider European Commission to voice concerns on the matter – and the threats it could pose to trade.

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“It could be supply and demand, it could be opportunism as well – that’s what we’re fearful of. The purpose of yesterday was to highlight this,” he said.

Noting that container shipping, especially internationally, is crucial to Ireland in particular – as a nation that exports over 90% of its dairy produce – Mulvihill said that DII has also been in talks with the European Dairy Association (EDA) and the Department of Agriculture, Food and the Marine on the matter.

Obviously, the commission doesn’t control the price of containers, etc, but it has to look at this and has to keep an eye on it.

Concluding, the director quoted European Commission Ursula President Von Der Leyen in highlighting “medical supplies and food, the single market and trade, have to continue – they’re mission critical for Europe”.

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