Consumer durable makers have called out a hit to their businesses due to the rise in freight charges resulting from the continued hostilities between Iran and Israel conflict. Companies in the sector are contemplating hiking product prices.
Manufacturers of white goods have stated that they are witnessing a significant increase in freight charges while they are facing delays in arrivals of raw material shipments.
“Due to this conflict escalation, freight prices are going up rapidly as the entire sea route is disrupted and the logistics companies are taking extreme advantage of it,” Avneet Singh Marwah, CEO SPPL, Exclusive Brand Licensee of Thomson in India, told businessline.
Increase in crude oil prices, exchange rates and priority shipments are affecting companies with an uptick in container prices.
“The ongoing geopolitical developments, whether the escalating tensions between Iran and Israel, China’s restrictions on rare earth magnets, or the US’s 90-day tariff policy, are creating a complex web of challenges. The 90-day tariff reprieve between the US and China has temporarily facilitated Chinese exports to the US, but it has skewed global container allocation priorities. Consequently, container prices have surged nearly fourfold, leading to shipment delays of 15 to 20 days. The Israel-Iran conflict is driving exchange rate volatility, exerting downward pressure on the Indian rupee. In high-volume scenarios, even a one-rupee fluctuation can significantly affect costs,” Arjun Bajaj, Director-Videotex, told businessline.
Price increases
“With the rising costs, price increases between 2 to 3 per cent are expected across all segments, particularly televisions,” added Avneet Singh Marwah.
With new launches and the festive season approaching, companies will examine implementing price increases.
“The challenges may not immediately translate into higher consumer-facing product prices—especially with the festive season approaching, where brands face intense price competition—these pressures could strain our cost structures if they persist,” added Arjun Bajaj.