The Costs in the Floral Industry
How Has The Rise In Costs Worldwide Affected The Floral Industry?
Every single industry, including the floral one, has been seen affected by the rise in costs the world is facing at the moment. Even after still facing the pandemic nowadays, the pandemic is not the only reason the costs in the world have gone up extremely quickly. Today we’ll discuss how the rise in costs has affected the floral industry through 3 difficulties they are facing.
1. Utter labor shortages. With not enough people to handle the everyday responsibilities and demands at work to be able to reach the monthly sales goals and overall company goals, prices have skyrocketed. Because there are fewer workers and less efficiency in the logistical processes, floral companies have been forced to increment their products and services prices.
2. The incredible rise in freight costs is also due to the capacity and labor shortages that flower companies are facing at the moment. Both floral companies, as well as floral distributors, are facing difficulties while freight costs rise. Evidently, the pandemic has had an effect on this, with an increase in freight costs of about 15-20% in 2021. Did you also notice an increase in fuel, while seeing high inflation as well? These are all factors that have affected the flower industry, but owners are always looking to be one step ahead and look for solutions.
3. Continuing, one of the reasons why costs have had a great increase and at a rapid rate this year is because of the flower handling and packaging process. In order for flowers to arrive at their destination in the best shape possible, there are a lot of careful and detailed logistical parts behind it. The recent increase in prices worldwide has been seen in the flower handling and packaging process because they must be harvested, pruned, and packaged, and to do this, there can always be a margin of error that can lead to damaging the flowers during the transit process, resulting in a loss.
While pricing from floral companies has been relatively stable with only minor product increases, transportation costs from airlines and trucking have seen rate and fuel surcharge increases as well, causing discomfort for all floral companies, distributors, and wholesalers.
The question is: what is causing all the increases? We can conclude it's due to higher raw material costs, higher labor costs due to COVID-19 disruptions, labor shortage, and incenting employees to come back to work and to meet significant demand increases caused by increased industry sales. When it comes to ocean freight, increased demand for space allows carriers to charge higher rates. The transportation time for containers to travel overseas is being extended (adding costs) due to port congestion. It is not unusual for ships now to wait 5 to 10 days offshore to get a berthing spot in the port to unload the containers of flowers at the final destination.
Why else do you think prices in the flower industry have skyrocketed? Let us know in the comments!