Over the past couple of years, international shipping expenses have surged. For example, according to thenationalnews.com, the price of shipping goods has soared by a staggering 250% as a result of Red Sea attacks
Yet, what puzzles both individuals and businesses is the reason behind this steep rise in shipping costs.
It's a ripple effect caused by the dwindling supply of goods being dispatched. Yet, it's not as straightforward as it appears.
Let's delve into why shipping expenses have skyrocketed in the past eighteen months.
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Over the 18 months of widespread lockdowns in many countries, Chinese shipping companies redirected many shipping containers to the markets of the USA and Europe.
Lockdown measures caused a buildup of consumer goods stuck in China.
To meet the surging demand for consumer goods in the US, shipping containers have been distributed across South Asia and Africa.
Shipping costs have significantly increased. Presently, the shipping sector faces immense pressure to accomplish a large volume of tasks with restricted resources.
In 2021, the price of transporting a shipping container surged from $3,000 to $8,000.
This surge can be attributed to disruptions in the supply chain, high fuel prices, costly gas expenses, and limited cargo capacity.
The production and shipment of goods both domestically and globally are experiencing significant growth.
With fewer commodities available for shipping to an expanding pool of buyers, the prices of these commodities have surged.
Courier firms face challenges in scaling up shipping volumes for goods due to various constraints within distribution channels.
Over the last year, a growing number of individuals have embraced eCommerce for purchasing various items. That includes clothing, digital products, meal kits, and groceries.
The increasing volume of products being shipped contributes to price hikes. To offset the rising costs of shipping and fluctuations in the supply chain, eCommerce enterprises adjust their prices accordingly.
The emergence of new Covid variants and the increasing incidence of cases pose a significant challenge for shipping firms globally.
Many nations that had recently eased travel restrictions are now reimposing lockdown measures. Governments worldwide are implementing lockdowns to manage the spread of the new variant. This has repercussions on shipping between countries.
The following are the factors taken into account when calculating international shipping expenses.
Businesses have options to reduce shipping costs. Here’s how you can achieve that:
The global pandemic has encouraged countries to become more self-sufficient. Many are seeking manufacturing alternatives closer to home.
Relocating manufacturing units nearby has enabled businesses to continue operations smoothly, even during lockdowns in other countries.
By having manufacturing sites closer to your main market, you can save on transportation costs and significantly reduce labor expenses as well.
If your manufacturing units are local, you can provide direct-to-consumer services. Many local businesses are adopting this approach, offering in-house or self-delivery to ensure products reach customers faster than expected.
In-house or self-delivery gives businesses full control over their delivery processes, increases visibility, and enhances the customer experience. This allows them to avoid relying on third-party services.
eLogii Optimization Software helps you with exactly that.
Utilize eLogii Route Optimization Software for Advanced Delivery Planning
Proof of delivery enables you to maintain records of each delivered package, mitigating potential false claims from customers.
Shipping expenses are expected to stay elevated in the foreseeable future, necessitating readiness for businesses reliant on shipping channels.
Local businesses should proactively prepare to act as needed.
For businesses aiming to handle local deliveries independently, we offer assistance. Our route optimization solution simplifies and streamlines the entire delivery process.