Global Shipping Cost Increases and Supplier Challenges

Shipping costs for ocean and domestic freight have been growing significantly since the rise of the COVID-19 pandemic and new surges in prices continue to take place as we navigate through 2021. In addition to record breaking costs, the rising demand for goods is causing severe delays in the supply chain. 

The circumstances surrounding ocean freight remain unstable and costs for a container continue to hover near record highs, with more increases expected in the near future. Thailand and Indonesia continue to Struggle with COVID-19, forcing them to reduce the number of employees working in their factories in order to eliminate congestion and prevent spread. This has a direct effect on items such as Maeploy® Sweet Chili Sauce and Chaokoh® Coconut Milk, causing interruptions in raw material, production, transit and documentation. For a full letter from the packer, click here. New contracts signed by importers indicate the spike will have long term effects and changes in the ongoing pandemic create an environment that continues to be unpredictable. 

For domestic freight, many of the drivers who left the industry at the pandemic’s onset have yet to return. This has forced carriers to raise driver pay to retain them, resulting in increases in their contract and spot pricing. Wildfires as well as severe weather conditions in various parts of the country are causing road closures on major highways and significant backlogs. These delays in transit as well as the lack of manpower are impacting pickup and delivery operations, with no real end in sight.

With ongoing delays, increased demand, lack of capacity and laborers, costs continue to rise and transit times remain volatile.