Shipping Costs: It's Not Just DTC
Every year, 1,000s of containers don’t make to their destination. MTAR shipments are 100% insured for this type of loss.
Shipping Costs: I’m talking about ocean and air freight not your DTC shipping costs! Shipping costs can eat significantly into the profit margins of any online apparel retailer when it comes to costs of goods sold to your warehouse or 3PL. It’s vital to understand the dynamics of the shipping industry. This blog dives into current shipping costs, major trends affecting those costs, and how to mitigate their impact on your business.
Current State of Shipping Costs
Variability is the Norm: Shipping costs are not static. They fluctuate based on factors like fuel prices, carrier rates, package dimensions, delivery locations, and global economic conditions.
The Rollercoaster Continues: While shipping rates surged during the pandemic, they’ve seen a decrease more recently. However, this decline might not last forever.
Look I’m aging myself here a bit, but I used to be able to ship a 40ft container from Pakistan to NYC for $2,400 dollars. Today its $5,000 dollars. That’s over a 100% increase. What affects shipping prices?
Supply and demand: If a lot of shipments are leaving from China due to Chinese New Year rates can jump.
Fuel Prices: If fuel prices increase rates can jump
Geopolitical Risk: If ship has to go to unstable countries, and or through unstable countries there is a increase for this.
Shortage of container: Containers constantly move around the world. After your load is dropped off it could be on its way to Australia. So if one port is short of containers due to more exports than imports then equipment (containers) cost will increase. Your shipping agent, makes a spread on the buy and sell cost. Shipping line costs him X and sells you the service for Y. You can shop your container costs with a few different agents to see if you are getting a fair cost.
Important to note…..GET MARINE CARGO INSURANCE THROUGH YOUR INSURANCE BROKER.
Unpleasant fact, but 1000’s of containers are loss every year from falling off the sides of boats. The shipping line is not liable for this. Its gone and you are out of luck. You need a shipping insurance policy to cover this.
At MTAR all shipments are covered by a marine cargo and intermodal insurance. Over our 22+ year history logistic providers have lost containers, containers have been stranded at sea, trucks have caught fire but thankfully we carry cargo insurance so our customers are always covered.