Costly shipping fees inflict losses on electronics — industry leader

home appliances
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AMMAN — Prices of heaters powered by gas or electricity are likely to drop by 5–8 percent in the fall, in the wake of a global drop in shipping costs, a Jordan Chamber of Commerce (JCC) official said.اضافة اعلان

Hatem Al-Zoubi, who represents the electrical and electronic industry at the JCC, said heater imports came to a virtual standstill earlier this year because the market was saturated with the product, as demand fell.

“Large quantities of electrical appliances are stored in warehouses,” he said. “They were imported when the shipping costs were very high.”

But with a significant decline in shipping costs since, serious losses will be inflicted on merchants, who may be forced to sell their stored products at cheaper prices, Zoubi told Jordan News.

Now, with a record price of gasoline and other fuel derivatives, many Jordanians are opting for other alternatives, like the Western wood-heated stoves.

“We demanded a reduction in the customs duties, given that heaters are a basic need for many Jordanians,” he said. He said duties and other taxes on heaters could reach 50 percent.

Already with dents in their wallets, Jordanians felt the sting of the skyrocketing prices of essential foodstuffs and oil derivatives, worldwide, which disrupted global supply chains and sent global inflation across the roof.

That sent jitters across the cash-strapped Kingdom as it was trying to recover from a blow dealt to its economy. The state spends heavily on hosting tens of thousands of Syrian and other refugees who fled regional wars seeking shelter in the Kingdom. The current economic climate was caused by a slowdown of revenue-generating commercial activity in the wake of COVID-19 restrictions including lockdowns

Zoubi said he expected heater imports to notably decline in the fall, but said that some heaters are already on their way to Jordan.

“The domestic purchasing culture changed in the past two years, and the consumer is only buying his needs and nothing else,” he said.

Ibrahim Ahmad, a marketing manager in one of Amman’s popular electrical appliances stores, said that traders “suffered a lot this year and the last”.

He said that the profit rate was “low last year due to the high shipping costs”.

“But despite the current drop in freight costs this year, citizens’ demand for electrical appliances remains insignificant,” he added.

He explained that at the beginning of each winter season, merchants are accustomed to a sudden jump in demand for heaters. “But because of the difficult economic conditions, we cannot predict the purchase quantities for this year,” he stated.

He said that “our company had six hangars to store the goods before, but nowadays we depend on one hangar only”.

He called for the need to tighten control on traders by the Consumer Protection Association, “as there are advertisements on social media platforms for traders who sell goods at very low prices, and this is an unfair competition.”

Qusai Al-Qudah, owner of another electrical shop, told Jordan News that there “is stagnation in the market due to the high costs”. He said because of the shipping costs, merchants have lost, or may have made small profits.”

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