The cost of electronics, clothes, and furniture is set to jump more than 10% next year because of the supply chain squeeze, UN report says

• Electronics, clothes, furniture could soar in price next year because of the supply chain crisis.
• Rising freight costs are putting pressure on businesses to raise prices.

Electronics, clothes, and furniture could jump in price next year if supply chain costs remain high, a new UN report said.

According to the United Nations Conference on Trade and Development (UNCTAD), prices of these products could rise by more than 10% globally on account of higher shipping costs. Consumer prices in the US could increase by 1.2% overall as a result of increased freight rates, it said.

A breakdown in the freight supply chain - caused by a surge in consumer demand since the end of 2020, combined with labor shortages - has created delays and traffic jams at seaports across the globe. As companies scramble to find a space on a ship, they're being forced to pay top dollar for it.

Some businesses are spending as much as ten times more than they would pre-pandemic to ship items across the ocean.

Businesses shipping low-cost and bulky goods, such as furniture or toys, are more vulnerable to these price increases, experts say. These items take up more room in containers and have smaller margins to absorb rising costs.

Gary Grant, founder of UK toy shop The Entertainer, previously told Bloomberg that in his 40 years in the industry he has "never known such challenging conditions from the point of view of pricing."

He said that he has had to stop selling some items, including giant teddy bears imported from China, because his company would have to double the price for shoppers to make up for higher freight costs.

"If they are bulky products it means you can't get very many in the container and that will have a significant impact on the landed price of the goods," he told Bloomberg.

UNCTAD Secretary General, Rebeca Grynspan, said in a statement Thursday that to bring shipping costs back to normal levels, there would need to be more investment in the supply chain infrastructure to improve its efficiency.