Hardware costs increase as China-Europe shipping costs see dramatic increases

Hardware costs increase as China-Europe shipping costs see dramatic increases

Hardware costs increase as China-Europe shipping costs see dramatic increases

The cost of PC hardware is set to soar in Europe, as rising shipping costs are placing tremendous strain on retailers, suppliers, and manufacturers alike. Many factors have impacted the cost of shipping containers of goods, such as a shortage of empty containers, the ongoing impact of COVID-19 on global trade, and historically high cargo volumes. 

According to insights from UK components retailers, the cost of bringing goods to the UK has increased by 6-8 times for many retailers. For context, that’s an increase from around £1,750 to values as high as £14,000, and retail margins are not large enough for retailers to absorb these increasing costs alone. In the UK and EU, the pricing of PC components and other East-Asian goods will rise, and there isn’t anything that consumers can do about it. 

Shipping companies are fighting over a limited supply of shipping containers, and consumers are fighting over who gets to ship their goods in those containers. Add on the additional safety measures that the COVID-19 pandemic has placed on global trade, and we have rising shipping costs. In the UK, Brexit has also had an impact, further complicating an already complex issue. 

Hardware costs increase as China-Europe shipping costs see dramatic increases  

In the chart below, the Financial Times has showcased how shipping costs have risen during 2020 and early 2021. Based on what we hear from our own sources, many UK companies are already seeing larger price hikes than what the Financial Times have reported. 

According to John Butler, the World Shipping Council president, ports are experiencing “historically high cargo volumes”, and that terminals are receiving more goods than they can “efficiently handle”. This congestion at ports is contributing to higher prices and longer waiting times before shipping. 

Earlier this month, ASUS announced that they were increasing the MSRP pricing of their components in the US due to higher “operating costs, logistical activities plus a continuation of import tariffs.” We now expect to see similar price increases in Europe due to today’s higher shipping costs and other logistical issues. Early 2021 is not a great time to be buying new hardware. 
 

Hardware costs increase as China-Europe shipping costs see dramatic increases
(Graph from the Financial Times)

The PC hardware industry is already experiencing shortages worldwide. Manufacturers are already struggling to keep up with demand, and rising shipping costs will not help that situation.

With Chinese New Year on the horizon, East Asian manufacturing is expected to slow down, allowing ports to tackle their backlog of orders and alleviate the strain on the shipping system. That said, high shipping costs are expected to remain throughout most of 2021.    

  
Hardware costs increase as China-Europe shipping costs see dramatic increases  

You can join the discussion on rising shipping costs and its impact on PC hardware on the OC3D Forums.