Shipping Update: The Rising Costs of Shipping

An overhead view of shipping containers at port.

Covid-19 has impacted many aspects of our business, and shipping costs are not immune. We are all in the same boat, figuratively and literally. Domestic shipping costs have almost doubled and the cost of importing products from China continues to creep up. We are also experiencing longer than normal delays in shipping. This is affecting everyone's margins from manufacturers to retail shops. How much longer can this possibly last? We understand that many feel frustrated by these changes. There are a host of reasons costs are climbing in ways we haven’t experienced before. 

CNBC recently ran a story claiming that  “an ‘aggressive’ fight over containers is causing shipping costs to rocket by 300%”. To put it in perspective, a container cost about $1,200 last March. Today, those costs have skyrocketed to roughly $6,000 per container. This is an astronomical rise in cost that affects everyone down the line. 

“The reason for this is the Chinese are being so aggressive about trying to get empty containers back … that it’s hard to get a container for US exporters,” Mark Yeager wrote in an email to CNBC, adding that 3 out of 4 containers from the U.S. to Asia are “going back empty.” 

A side view of shipping containers at port.

To add to the additional burden that retailers now carry, FedEx suspended its Express operations and then resumed them again on March 1st with an additional Covid-19 surcharge. They are not alone in adding this charge. We have seen the same increases to shipping costs from UPS, DHL and all other freight companies. 

We have also observed shipping delays that may be related to vessel activity and issues with fuel. In the wake of these challenges, some have opted to use discounted freight companies. But beware - because of these extremely low prices, the quality of the delivery often suffers. Remember the old saying “You get what you pay for?” This is 100% true in this case. Damages from these discount freight companies have increased, in part, because of the volume they have to deliver in such a short time.

A side view of a cargo ship at port.

Before you worry any further, there is a light at the end of the tunnel. Because fees are dropping back down, we know that a return to normalcy is right around the corner. The inflated shipping costs that burden so many retailers will hopefully be coming to an end soon. As your partner, know that we are striving to ensure that all products are received in a timely manner in clean, undamaged boxes. Our goal is always to ensure the best possible experience for our retail partners.

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