How Inflation Is Impacting Shipping
Small and medium-sized companies rely on shipping processes to send their goods to the appropriate destinations. However, current record inflation highs make these efforts more difficult for the average company to handle.
Inflation and U.S. import rates have continued to climb, making it more and more difficult for businesses to operate. Learn more about how inflation and rising prices have impacted the U.S. shipping process and if there’s anything you can do to stop it.
Inflation and U.S. Shipping
Currently, there are global supply and demand issues. Demand has increased in recent months, but supply chains are still experiencing delays that have trapped goods in ports worldwide.
As a result of these issues, insurance, shipping and freight rates have all skyrocketed. To add more difficulties, China has recently locked down several cities due to one of their worst COVID spikes yet. In other places, factories are still closed, or companies are raising wages while still having difficulty finding workers.
Russia’s war on Ukraine has also worsened matters. Each of these factors plays a role in the United States’ current inflation level.
Inflation impacts many sectors of U.S. shipping, including:
- Import container backlogs.
- Less labor availability.
- Congestion at ports.
- Rising fuel prices.
- Unreliable supply chains.
- Surcharge increases.
- More expensive raw materials.
- Delays and long lead times.
As inflation raises the shipping rate, you can only do so much to absorb those costs. Inflation has not been easy on anyone. Many companies have little choice but to increase the prices of their products to account for high shipping costs.
Small and medium-sized companies face the brunt of inflation as they try to figure out how to handle these issues.
How Can Businesses Combat Inflation?
Inflation impacts everyone, from companies to shippers and consumers, so it’s essential to look for ways to reduce it. Shippers can work to minimize the impacts of inflation by planning ahead.
Planning ahead by weeks or months can reduce the effects of inflation or make them easier to deal with. Avoiding last-minute shipments also helps lower shipping costs.
Stay on Top of the Changing Landscape With Universal Cargo
Whether you’re importing or exporting goods in the United States, you’ve likely noticed the effects of inflation. It has caused numerous issues, ranging from rising fuel prices to higher surcharges and other supply chain logistics problems.
Keep an eye on the fluctuating relationship between shipping and inflation by reading and subscribing to our blog today.