Mass container shortage has disrupted international supply chains and seen the cost of freight and shipping increase exponentially across all sectors.
While it may be easy to blame this single factor for an increase in freight cost, many more factors have contributed to the inflated prices we are currently seeing across the sector.
So what are some of the other reasons that prices can’t seem to slow down?
Brexit has caused the UK more than a few shipping issues, including increased shipping costs with additional fees, tariffs, and duties.
The UK lost subsidies and privileges when it left the single market, so shipping to and from the UK is now treated as any other international nation.
As a result, the associated costs of shipping have risen astronomically. Additionally, border bureaucracy has slowed shipments and transportation issues are more common than before.
These further complications have certainly contributed to the increases.
The shipping industry has been a hard-hit sector since the COVID-19 pandemic began due to increasing oil prices, which are invariably passed on to businesses seeking to ship.
Add to this the container shortage issue created by the necessity to lockdown or isolate and the fact that many industries’ production halted during early 2020.
That was followed by a surge in the latter half of the year when demand increased again, and that skyrocketing demand has allowed hyperinflation of costs to occur – those who can pay the most will get first dibs on shipping their goods.
Add to this pressure cooker restrictions for the aviation industry that further increased demand for sea freight.
And there you have it – COVID-19 created a perfect storm of challenges to overcome but are sure to have contributed to the price increases.
Few Ocean Freight Alternatives
There is a lack of viable alternatives to ocean freight right now with all the restrictions, which means this sector holds the cards for transporting goods. They can set the number for shipping costs and their astronomic rise.
Alternative transportation options such as air or train may be feasible for some higher-value goods, but this is expensive with current restrictions.
Most shipments need more economical options, but these options are limited. Ultimately this means prices go up across the entire sector.
Consumers must absorb increasing costs when they purchase items, so it’s still viable for companies to import them into the country.
Can Anything Be Done?
One of the best ways to overcome these increased shipping costs at present is to speak to your freight forwarder and lock in their price as far in advance as possible.
However, shipment charges are increasing every day with no relief in sight, so it helps to take a long view of what’s payable on your shipment while avoiding surcharges.
It’s worth also seeing what payment options are available, and having access to any early booking facilities that may be offered may help cushion the expanding costs.
This is a guest post by Barrington Freight in UK. The views expressed in this article are those of Barrington Freight and does not necessarily reflect the site’s views and opinions on the subject.