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Freight Shipping Costs Surge

Freight Shipping Costs Surge

Small businesses have been navigating as freight shipping costs surge drastically by finding deals to ship their freight at the best price.

Freight Shipping Costs Surge

The past couple of years has been dangerous for business owners around the world. Countless companies have closed due to the current disruptions in their industry. Disruptions have affected both ends of the supply chain, either driving up transit costs for shippers, or consumers missing freight due to delivery delays. As freight shipping costs surge, small business owners search for the best deals to ship their freight both nationally and internationally.

2022 Freight Shipping Costs Surge

Freight shipping costs are reaching an all-time high in 2022. Russia (currently the world’s largest oil producer) invading Ukraine, and the world is experiencing gas and oil import shortages. The decrease in trade and production of oil is leading to skyrocketing shipping costs. Additionally, the Covid-19 pandemic has severely delayed deliveries, increasing shipping time and prices since late December of 2019. As freight shipping costs surge, small businesses have been looking to find the best deals to navigate their industry’s supply chain.

Covid-19 Pandemic

The COVID-19 Pandemic has had a vital impact on people’s lives, families, and communities. In these times of global distress, the ability of shipping services to continue transporting food, energy, and medical supplies around the world can help determine the outcome of the end of the pandemic.

Shipping Delays At Ports

Sometimes a ship may be denied access to a port because crew members on either side of the pickup or drop off of cargo are ill with Covid-19. In this event, the cargo will not unload off the ship. Cargo will stay packed until access is granted to the shipping port. In many cases, businesses have a shortage of employees due to a portion of the staff being unfit to work. Low staff turnout in a shipyard will either slow or even stop productivity until there is a sufficient number of employees working.

Global Storage Container Shortage

Companies aren’t unloading shipping containers fast enough to be sent back to their point of origin. This is a major problem in Los Angeles and Long Beach ports along US West Coast. Due to many ships being unable to port and cargo unable to unload, many ships are forced to anchor and wait away from shore. For the time ships sit idle, the company continues paying for the ship’s needs while it is docked at sea. In 2021 handling costs for a 40-foot container reached highs of $20,000 UDS. This is 20 times more expensive than a trip back to its original port.

In addition to the cargo containers being stranded on anchored ships, many available storage units are still stuck inland. With an insufficient amount of ships to move them to their desired location, they remain unused taking up valuable space and money.

Russia Invading Ukraine

The Russian invasion of Ukraine has taken a toll on many global supply chains. While many supply chains are already restricted due to the COVID-19 pandemic, it is now projected to take even longer to stabilize the economy again. This event has been disrupting many global supply chains in a handful of industries:

Gas/Oil Prices

In 2020, at the beginning of the pandemic, oil prices were $20 a barrel. In early 2021 as the economy recovered, oil prices returned to “pre-pandemic” prices of around $60 a barrel. Presently in 2022 prices have spurted above $100 a barrel after Russia invaded Ukraine. Many countries have agreed to stop buying most Russian oil, but Russia continues selling in huge volumes as it now sits as the second-largest oil exporter worldwide.

The shipping industry is dependent on fossil fuels for fuel to transport goods and fortunately, the inflated prices are dropping. In America, fuel prices ranged from $4.35 to upwards of $7 USD per gallon (depending on the state you reside in). As prices rise for fuel. shipping costs also rose to compensate for the extra money being spent to transport freight.

Processing Chip Shortage

Ukraine supplies nearly half of the world’s neon gas. Neon gases are used to produce semiconductor chips. These processing chips are used in televisions, smartphones electronic shipping devices (ELD), and computers. Since the conflict began, prices on semiconductor chips have increased drastically. This has led to the retail prices of electronic devices rising.

How Small Businesses Save On Shipping Freight

The freight shipping market is a reactive industry. Freight carriers can’t create demand, they just react to it. When the economy is strong, demand is high, capacity is low and rates rise. With our extensive, fully vetted carriers, we’ve got your shipping covered. Most FreightCenter customers probably didn’t even know that the freight-shipping market was going through such a rough time, because we make shipping easy and affordable.

How Companies Have Saved With FreightCenter

Stump Standards is a modern table and woodwork company that is a frequent customer of FreightCenter. Our Agents help them find the best rate available to ship their decorative tables. By exploring all available carriers with them in real-time our agents are able to conduct a quote for their specific shipping needs. Liftgate services are a key accessorial in generating their quotes for R+L Carriers since most of their trucks come with a liftgate.

While working with Stump Standards, like all of our valued customers, we go through all accessorials that they need to make sure the tables ship safely without any slipups or billing adjustments.

Shipping unique tables many times can ask for more than just a liftgate accessorial on the order. These services you can add to your order are very important to mention for the most efficient quote for your shipment:

Residential Services
Limited Access Location
Inside Pickup/Delivery
White Glove Services
Final Mile Delivery

Services that are actually needed for a shipment but were not requested will end up being charged to the shipper after the shipment is complete. Avoid billing adjustments and all needed accessorials to your shipment. When Stump Standards needs to ship their table(s) to a shop or a customer, they call one of our shipping experts to get the job done correctly and affordably. At FreightCenter, we make sure all items are added to your quote correctly for the best price and the best outcome.

Shipping With A 3PL

One of the most common mistakes made by small businesses is to book their shipment directly through a carrier instead of using a Third-Party Logistics provider (3PL). It’s easy to understand why this mistake happens. It’s popular to believe that the best way to save money is by “cutting out the middle man”. But, in the case of shipping freight, a good 3PL will save you money every time due to the fact that we ship in mass quantities, therefore, giving us better deals with the carriers we use. From there we can help you find the most affordable freight carrier that meets your unique needs.

Strategizing For Supply Chain Disruptions

From war to a pandemic, there are many types of disruptions that businesses face. It is vital to have plans and a strategy regarding a fluent flow of your supply chain. Having plans in place eases disruptions to your business and shipping needs. Having a business continuity plan is the key to a consistent shipping strategy and a healthy supply chain. Don’t lose your company due to a faulty plan. Strategize a business continuity plan to ensure a quick bounce back to your full capacity production in the event of a tragedy.

Business Continuity Plan

A business continuity plan is a document outlining how the company will continue operating during an unexpected event. Many companies were taken by surprise when the Covid-19 pandemic took their business. For some, the costs of shipping became too much for their usual haul load. Don’t be caught without a backup plan.

Expect The Unexpected

Due to past disruptions and current events, businesses have been conducting business continuity plans to help secure their industry’s supply chain. Disruptions can be disastrous to all industries causing spikes in process and drops in production. For instance, the disruption Hurricane Katrina caused to the flow of goods brought a halt to the shipping of many important goods in and out of America for international trade. Therefore, the world suffered from an event in a single country. It is best to prepare before the unexpected comes. Stay informed on ways to ship during times of economic decline to maintain a continuous supply chain for your industry.

Ship With FreightCenter

The bottom line is that you want and need to keep your products in the hands of your customers. When Freight Shipping Costs Surge, it can be extra confusing to keep your product’s shipping. You need to spend time running your business. In addition, you shorten the time searching for ways to ship your goods. That’s where partnering with a 3PL, like FreightCenter, gives you the upper hand during normal and unprecedented events.

We understand how critical it is for your business to run smoothly, and we are ready to help you develop a supply chain strategy that takes the guesswork out of shipping. Instantly compare quotes from top carriers or call one of our shipping experts at 800.716.7608

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