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Meatballs with furniture coming to Snowtown?

By johnboy 8 August 2013 28

ikea

The Canberra Times has been thrown a bone about Ikea’s interest in the new Majura Parkway Estate.

Normally Canberra is too small a market for an IKEA. But we do have a transient population, lots of money, and a love of Scandinavian style.

For what it’s worth last year I wrote a poem about IKEA for Bad Slam No Biscuit.

[Photo by Smath. CC BY 2.0]

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Meatballs with furniture coming to Snowtown?
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dungfungus 3:18 pm 04 Apr 14

watto23 said :

dungfungus said :

Holden Caulfield said :

2015.

The other problem IKEA would face in Canberra is the double handling on shipping given that there would be some full containers destined for Canberra direct however, because Canberra is an AQIS rural destination the containers would have to be steam-cleaned before they left Port Botany and started their road journey to Canberra. Sometimes, if the contents are wood products the whole container has to be fumigated and sometimes unloaded and re-packed before it leaves the wharf. This process can delay a container for several days and it costs hundreds of dollars. It is therefore far easier to deliver the container immediately to a Sydney address in Sydney, de-stuff it and re-consign the contents to the interior by normal road transport which is expensive because there is little or no backloading out of Canberra.
One of the biggest hurdles Canberra Airport will have if and when they get their international airfreight hub going, is dealing with the AQIS rural destination regulations.

AQIS do not treat packages differently based on their destination in Australia. A bit of logic here would stop you from making ridiculous statements. If a insect/biohazard/whatever gets into the country regardless if destination is Sydney or Canberra it will a problem. You could argue maybe less chance in Sydney, but they don’t take risks like that.

We are not talking about “packages” – we are talking about sea containers but I accept your brain size is commensurate with a that of a package.
http://www.daff.gov.au/biosecurity/import/general-info/operations-improvements/postcode-review

Note Canberra and suburbs are still listed as Rural Destinations.

watto23 3:31 pm 03 Apr 14

dungfungus said :

Holden Caulfield said :

2015.

The other problem IKEA would face in Canberra is the double handling on shipping given that there would be some full containers destined for Canberra direct however, because Canberra is an AQIS rural destination the containers would have to be steam-cleaned before they left Port Botany and started their road journey to Canberra. Sometimes, if the contents are wood products the whole container has to be fumigated and sometimes unloaded and re-packed before it leaves the wharf. This process can delay a container for several days and it costs hundreds of dollars. It is therefore far easier to deliver the container immediately to a Sydney address in Sydney, de-stuff it and re-consign the contents to the interior by normal road transport which is expensive because there is little or no backloading out of Canberra.
One of the biggest hurdles Canberra Airport will have if and when they get their international airfreight hub going, is dealing with the AQIS rural destination regulations.

AQIS do not treat packages differently based on their destination in Australia. A bit of logic here would stop you from making ridiculous statements. If a insect/biohazard/whatever gets into the country regardless if destination is Sydney or Canberra it will a problem. You could argue maybe less chance in Sydney, but they don’t take risks like that.

dungfungus 3:30 pm 02 Apr 14

Holden Caulfield said :

2015.

The other problem IKEA would face in Canberra is the double handling on shipping given that there would be some full containers destined for Canberra direct however, because Canberra is an AQIS rural destination the containers would have to be steam-cleaned before they left Port Botany and started their road journey to Canberra. Sometimes, if the contents are wood products the whole container has to be fumigated and sometimes unloaded and re-packed before it leaves the wharf. This process can delay a container for several days and it costs hundreds of dollars. It is therefore far easier to deliver the container immediately to a Sydney address in Sydney, de-stuff it and re-consign the contents to the interior by normal road transport which is expensive because there is little or no backloading out of Canberra.
One of the biggest hurdles Canberra Airport will have if and when they get their international airfreight hub going, is dealing with the AQIS rural destination regulations.

Holden Caulfield 4:36 pm 01 Apr 14

2015.

dungfungus 8:09 am 12 Aug 13

JC said :

dungfungus said :

You mean SOME of us are prepared to pay the high price and others simply can’t afford to.
We were talking about IKEA but let’s look at the other one where you buy your fashion apparel.
Zara is a Spanish company and Madrid is the major European distribution centre for Chinese goods (they have a huge warehouse city there). The economy of scale afforded by a large population and short distances between major cities in Europe/UK contribute greatly to the cheaper prices.
Incidentally, the cost of shipping a container from China to Canberra is no cheaper than from anywhere else in the world.
If the freight component was as minor as you suggest then why isn’t Canberra a major distribution centre for Australia?

So let me get this right. The cost of shipping a container load of clothing from Asia to Europe is minor, but the cost of shipping Ikea from Europe to Australia is the major cost? Yeah right pull the other one.

As mentioned shipping is a minor part of the pricing for Ikea and also Zara. The problem is people, yes some not all will pay a premium for the brand. Ironically in Europe Zara is an every day brand not the upper end brand and price that people in this country think it is.

So I will repeat prices are what they are here because people are prepared to pay it. Nothing to do with shipping, nothing to do with the goods are made, but everything to do with what people here are prepared to pay.

JC said :

dungfungus said :

I think the argument was about the perception that prices in Australia were 3 times as much as Madrid or London. I agree that SOME people are prepared to payer the Australian prices.

Actually that is fact not perception, the price in the motherland is often on the price label of Zara goods. Also I used to live in London so know the prices that we paid for goods over there, and for most consumer goods they were significantly lower, especially clothing.

dungfungus said :

The container shipping business into Australia is like a cartel. Do you remeber when only Qantas and JAL were the only air carriers between Australia and Japan? When this deal was broken and competition started fare prices plummeted. The same would apply to shipping rates if the industry was more open to competition. Also, because we have little in the way of maufactured exports (iron ore, coal and wheat are bulk) most full containers coming into Australia have to go back to Asia or Europe empty. This is a huge cost impost. I don’t know your background and I have given you a few hints what I was involved in so why don’t you take notice?

Crap in relation to the container ships. If you have a look at the shipping patterns of the major container ship operators their ships operate circuits rather than point to point trips. For example a ship may leave the UK, head to Rotterdam, down the coast of France/Portugal, then, depending upon ship size and ports of call they head either down the coast of Africa to South Africa or sail into the Mediterranean and through the Suez canal, then to somewhere like Singapore, maybe to Australia then to China and back to Europe via Russia. This is a very effective way of transporting goods that minimises running ships empty. Now whilst you are right we don’t export as much as we import in terms of containers the effect is very minimal due to the way the ships are operated with minimal effect on pricing.

Let’s clear up someyhing about the way Zara’s stock is moved around the world. Being fashion goods, they would be out of fashion before they cleared the China Sea if they were sent in a shipping container. Accordingly, they are flown all over the world. Clothing is also light which makes it very cost effective to deliver by air.
Flatpack furniture is on the otherhand very heavy and there is no alternative but to ship it by containers. To this end there are two choices in sea shipping, conference rates (very expensive) which gets a cointainer from Europe to Port Botany in 20 -25 days and China to Port Botany in 12 -16 days or non-conference rates which are 25 -50% cheaper but there is no mininum delivery time guaranteed and your container can end up waylaid in tropical ports (like Singapore) for weeks with the contents deteriorating and getting mouldy. If you are someone like Ikea you will use conference shipping as there must be certainty for the time of delivery to the customer. It doesn’t end there either because when the container reaches Sydney it has to be de-stuffed, warehoused and the various items re-shipped to the individual customers. The more a container is unloaded and reloaded en-route, the greater the danger is of damage to the contents so non-conference shipping is more suited to industrial equipment.
I don’t think Ikea would be able to establish a store in Canberra and sell at the same prices as they do in Sydney because of the on-costs of delivery. Are you with me?
Re your “tramp steamer” searching the world’s ports for goods to carry to Australia, well I can’t think of anyone in Australia that would still use that model because the main problem is that most ships will not sail from Europe unless they are booked fully loaded. Nevertheless, sometimes containers cannot be loaded in Italy because the ship is already full because someone has “bought” someone elses booking for a fee.
There is also LCL (when you need less that a full container of space). This comes at a higher cost (theory of subdivision).
BTW, do you have to commence every comment with the word “Crap”?

JC 9:39 pm 11 Aug 13

dungfungus said :

I think the argument was about the perception that prices in Australia were 3 times as much as Madrid or London. I agree that SOME people are prepared to payer the Australian prices.

Actually that is fact not perception, the price in the motherland is often on the price label of Zara goods. Also I used to live in London so know the prices that we paid for goods over there, and for most consumer goods they were significantly lower, especially clothing.

dungfungus said :

The container shipping business into Australia is like a cartel. Do you remeber when only Qantas and JAL were the only air carriers between Australia and Japan? When this deal was broken and competition started fare prices plummeted. The same would apply to shipping rates if the industry was more open to competition. Also, because we have little in the way of maufactured exports (iron ore, coal and wheat are bulk) most full containers coming into Australia have to go back to Asia or Europe empty. This is a huge cost impost. I don’t know your background and I have given you a few hints what I was involved in so why don’t you take notice?

Crap in relation to the container ships. If you have a look at the shipping patterns of the major container ship operators their ships operate circuits rather than point to point trips. For example a ship may leave the UK, head to Rotterdam, down the coast of France/Portugal, then, depending upon ship size and ports of call they head either down the coast of Africa to South Africa or sail into the Mediterranean and through the Suez canal, then to somewhere like Singapore, maybe to Australia then to China and back to Europe via Russia. This is a very effective way of transporting goods that minimises running ships empty. Now whilst you are right we don’t export as much as we import in terms of containers the effect is very minimal due to the way the ships are operated with minimal effect on pricing.

IrishPete 6:36 pm 11 Aug 13

watto23 said :

dkNigs said :

Personally after a visit to Ikea in Tempe I left feeling like it was quite of lot of cheap nasty crap and wouldn’t ever go back except for maybe built in wardrobes or a kit kitchen. If this does come to Canberra though it’s going to kill the cheap furniture stores.

Which cheap furniture stores? The $2 shops with occasional bits of furniture. IKEA is generally much highly in quality and style then anything offered there. I’ve got a dozen IKEA bookcases and had them for years and years. never an issue, the cheap ones from around town, keep breaking so i end up replacing them with IKEA ones. Did my whole study with i think 4 bookcases and a small corner one for about $450. I found plenty of bookcases for $200 and plenty of cheap ones too, but none had the modularity and different sizes that Ikea had, which would have required custom furniture made.

Agreed. I have some basic Ikea pine shelving units that I bought in the UK and eventually shipped out to join me in Perth, and they are still with me. So probably about 20 years old and still going strong after several assemblies. disassemblies and long-distance transport.

Some of their stuff is throwaway, but most is built to last, even the cheap stuff.

My kitchen units are fantastic and are 10+ years old (Varde if anyone wants to know).

I can’t wait for them to come to ACT.

IP

dungfungus 5:20 pm 11 Aug 13

JC said :

dungfungus said :

You mean SOME of us are prepared to pay the high price and others simply can’t afford to.
We were talking about IKEA but let’s look at the other one where you buy your fashion apparel.
Zara is a Spanish company and Madrid is the major European distribution centre for Chinese goods (they have a huge warehouse city there). The economy of scale afforded by a large population and short distances between major cities in Europe/UK contribute greatly to the cheaper prices.
Incidentally, the cost of shipping a container from China to Canberra is no cheaper than from anywhere else in the world.
If the freight component was as minor as you suggest then why isn’t Canberra a major distribution centre for Australia?

So let me get this right. The cost of shipping a container load of clothing from Asia to Europe is minor, but the cost of shipping Ikea from Europe to Australia is the major cost? Yeah right pull the other one.

As mentioned shipping is a minor part of the pricing for Ikea and also Zara. The problem is people, yes some not all will pay a premium for the brand. Ironically in Europe Zara is an every day brand not the upper end brand and price that people in this country think it is.

So I will repeat prices are what they are here because people are prepared to pay it. Nothing to do with shipping, nothing to do with the goods are made, but everything to do with what people here are prepared to pay.

I think the argument was about the perception that prices in Australia were 3 times as much as Madrid or London. I agree that SOME people are prepared to payer the Australian prices.
The container shipping business into Australia is like a cartel. Do you remeber when only Qantas and JAL were the only air carriers between Australia and Japan? When this deal was broken and competition started fare prices plummeted. The same would apply to shipping rates if the industry was more open to competition. Also, because we have little in the way of maufactured exports (iron ore, coal and wheat are bulk) most full containers coming into Australia have to go back to Asia or Europe empty. This is a huge cost impost. I don’t know your background and I have given you a few hints what I was involved in so why don’t you take notice?

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