Multiple Companies Report 500%-1000% Increase In Shipping Prices

As a result of the continually worsening supply chain bottlenecks currently plaguing the United States, companies are suffering through increased shipping costs to the tune of several hundred percent.

While giving an interview with CNBC, the chief executive of grill company Traeger, Jeremy Andrus, talked about how his firm is currently experiencing diminished profits as a result of massively increased shipping costs.

“Bringing a 40-foot container from Asia to the U.S. twelve months ago was about $1,500. Today, you’re spending upwards of $30,000 and we’re certainly averaging close to $10,000,” stated Andrus, seemingly implying that the standard shipping rates for his company have spiked almost 550%. “Our inventory is big and heavy. It takes up a lot of container space, and so we are particularly sensitive to transportation costs.”

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“We’re sensitive to a near-term shift. The world will right-size itself, in terms of these costs, and we will see some significant flow through to the bottom line,” stated Andrus. “But right now, we are driving the brand. We are thinking about the engine, the brand health.”

As we have seen previously, Bob Unanue, the CEO of Goya Foods, raised similar issues when giving an interview with Fox Business.

“We bring products like coconut water from Thailand [and] from Vietnam and a container with about 1,300 cases of coconut water in it used to cost about $1,800, $1.40 a case; it’s gone up to $20,000 to get on a container ship if you can,” he stated, seeming to point out that shipping costs for his firm have jumped well over 1,000%.

“We’re vertically integrated,” stated Unanue, before adding that even the base cost of packaging materials has seen spikes recently.

The United Nations Conference on Trade and Development recently put out a report that stated “container ship carrying capacity, container shortages, labour shortages, continued on and off COVID-19 restrictions across port regions and congestion at ports” may just end up causing price hikes for the consumer all throughout 2023.

“Manufacturers in the United States rely mainly on industrial supplies from China and other East Asian economies, so continued cost pressures, disruption and delays in containerized shipping will hinder production,” stated the world organization. “A 10% increase in container freight rates, together with supply chain disruptions, is expected to decrease industrial production in the United States and the euro area by more than 1%, while in China production is expected to decrease by 0.2%”

The report also listed a few predicted price increases that consumers could see, including:

  • Computer, electronic and optical products — 11.4%
  • Furniture; other manufacturing — 10.2%
  • Textiles, wearing apparel and leather products — 10.2%
  • Rubber and plastic products — 9.4%
  • Basic pharmaceutical products and pharmaceutical preparations — 7.5%

 

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