How To Control Freight Shipping Costs in 2022
If you have placed freight shipping orders within the past year, you may have experienced the sticker shock of your life when you saw your bill. Globally, freight shipping costs are unprecedented. Let's look at some major factors contributing to these staggering shipping prices and identify ways businesses can best control their shipping costs in this economic environment.
Why are shipping costs so high in 2022?
The main cause of the sudden escalation in shipping costs is the COVID-19 pandemic. Current shipping prices are a prime example of the pandemic's impact on global supply chains. Shipping prices are now predicted to stay at the current high levels into 2023. Specifically, the pricing problem is attributed to:
- A U.S. nationwide shortage of truck drivers
- A global shortage of shipping containers
- A steep rise in diesel fuel prices
Shipping Capacity Shortage Due to COVID-19: The world's shipping containers, needed for shipping manufactured goods, have been getting stuck in foreign ports far from areas that have returned to regular or semi-regular operations sooner than others.
Major Overseas Ports Threatened: To compound the problem of the shipping container shortage, there was the Suez Canal accident in March 2021 that blocked as much as 12% of global freight transport from passing through the canal for nearly a week. That single incident exacerbated the problems stimulating the pricing escalation that we are seeing the impacts of today.
Ways to Reduce Freight Shipping Costs in 2022
Many businesses dependent on U.S.-made products and domestic ground shipping transportation aren't as affected by ocean shipping issues. They are free to switch to different modes of transporting their goods or make local
- Ship air freight: With ocean shipping costs so high, air freight may make more sense for some businesses that need to speed up the delivery process.
- Switch manufacturing locations: If possible, void global shipping port backups. Seek new manufacturing locations and switch to one that enables you to cut risks.
- Consider outsourced manufacturing: Moving your operations closer to your customer base may be wise if you can identify a manufacturer closer to your key markets.
- Consider in-house delivery: If your manufacturing facility and customers are in close proximity , consider an in-house delivery operations investment.
- Price carrier services: Alternative services may provide the shipping and delivery support you need to position your internal operations for a shift to in-house shipping.
- Plan delivery schedules well in advance: Use your shipping service's tools to plan routes for orders quickly and well in advance of the dates that service is needed.
- Fine-tune your logistics: Balance your transportation usage among drivers' total orders and hours. This time-intensive customization task is managed for you when partnering with a third-party logistics (3PL) expert like Unishippers.
When will shipping costs restabilize?
Some industry analysts estimate that the abundance of new freight containers coming online will not bring down shipping prices substantially until 2023. Therefore, small businesses are advised to act in the long-term interest of your enterprise by considering necessary changes to your manufacturing and shipping logistics.
Maintaining customer satisfaction and trust levels may take precedence over shipping costs, possibly through the remaining quarters of 2022. This may be the right time to consider partnering with a reliable 3PL service. You will discover that a 3PL can efficiently and effectively manage your freight-shipping challenges and help you navigate the pandemic and post-pandemic worlds.
To Control Freight Shipping Costs, Contact Unishippers for a Free Shipping Analysis
Unishippers is the one-stop 3PL for small to mid-sized businesses. By leveraging the buying power of our 108,000+ customers, we provide significant savings through access to negotiated rates. But that's not all! With Unishippers, affordable and robust freight shipping options are always within reach through our portfolio of 65+ industry-leading LTL carriers.