Shipping Costs Increasing, Contributing to Inflation

Online shopping has become bigger than ever. As Covid-19 swept through the world, more and more people restricted their shopping to online only. This produced a massive spike in e-commerce sales, which while a great thing for the profit margins of big corporations like Amazon and Walmart, left small and mid-sized companies reeling. 

That’s because shipping prices increased, both globally and nationally. 

Shipping Costs Increasing Globally











Shipping overseas changed dramatically over the past year. According to a Time news report, “Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping.”

The high demand for products, as well as a workforce shortage and lack of shipping containers resulted in these prices increasing by 205% for container shipping, according to HSBC Holdings Plc (Time). This is despite an increase in US tariffs.

Increase in Air Shipping

This left some retailers choosing air shipping, which increased its volume of cargo by 25% over the previous year, with the shipping price tripling compared to a typical year. 

Ground Shipping Costs in the US

Ground shipping also was hit hard, as again shipping companies like UPS and FedEx were unprepared for this wave of online shopping. Labor was hard to come by to fulfill the demand, and so driving rates increased, thereby increasing shipping costs to the customer.  Holiday surcharges shipping companies implemented in 2020 remained and were stacked onto the usual five to six percent cost increase in 2021.

Bill Adams, senior economist at PNC, sums up the shipping problem: “The pandemic has made business much harder to do; business surveys have reported the worst supplier delivery delays on record in recent months.” 

Inflation on the Rise

In the past year, prices have increased by 4.2% — the quickest rise since September 2008, according to a CBS News report. As inflation rises to 5% over the coming months, expect to see an increase in prices of products, as well. 



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