Why Shipping Prices Are Still On The Rise
As the economy continues to recover from the COVID-19 pandemic, shipping prices across the country continue to rise. While experts believe prices will drop eventually, the spike is enough to impact your business and how you handle your distribution and shipping needs. Understanding the root causes of the climbing prices and how they affect your business can help save money.
What Exactly Is Going On?
According to CNBC, the Baltic Index, which tracks rates for vessels that carry dry bulk commodities, gained 74% from the start of the year to July 3rd. Also, U.S. Bank reports that overall freight spending jumped 10.1% over first-quarter levels, bringing the total to its highest recording in the index’s history. There are several different reasons for this.
First and foremost, as consumers feel more comfortable spending the day shopping, the demand for products increases. The higher the demand for products, the higher the demand for shipping. Secondly, authorities are pumping cash into the system through stimulus measures, which has been a key reason for the increase in shipping.
How Does This Affect Your Business?
An increase in spending sounds great, right? Well, it is, and it isn’t for businesses. At least not at the rapid rate we’re currently experiencing. The rapid growth in GDP as the country recovers from the pandemic has led to a blockage in the shipping process. Quite literally. Across the world, shipping ports are dealing with port congestions.
As this congestion makes the shipping process more arduous for shipping companies, prices will naturally increase. These congestions should clear over time, but growing concern over the delta variant and increased restrictions in some regions of the world complicates the process.
So not only will you have to pay more for shipping, but there’s a real chance your order isn’t adequately fulfilled in time. Even domestic freight shipping services may see a delay. Therefore, if you’re dealing with time-critical shipping, it’s wise to explore all options.
Why Don’t They Build More Ships?
All business owners who deal with the spike in shipping prices ask the same question: “why don’t they just build more freights?” While this may sound like a solid solution on paper, this would only worsen freight companies’ situation. Over the years, freight companies have developed a rock-solid discipline not to order new ships.
Once these shipbuilding needs have been met, the increase in demand has already fizzled out. So freight companies spent money and human resources on new ships that aren’t needed when they’re finished.
Trifecta Transport Can Help
Dealing with the stress of logistics during regular periods can be headache-inducing enough—factor dealing with logistics during a pandemic and a spike in shipping prices, even worse. The team at Trifecta is here to help streamline your logistics process to save you the hassle. We take care of the entire life cycle of your shipment, so you don’t have to contact multiple carriers to ensure you get your order on time.
We go above and beyond your basic logistic needs. If you have a unique shipment or need something as soon as possible, we can help. We work on your schedule, so we’re there when you need us most.
Contact Us Today
If you’re struggling to find a solution to the increase in shipping prices, our team at Trifecta Transport can make your life easier. Contact us today for a quote on your shipping solutions.