Do you think customer demand and expectations for shipping have reached unfathomable levels? If not, then you likely haven’t been paying attention. Businesses and shippers are getting pushed to the brink.
Global shipping containers are sitting untouched in the ocean for weeks. Amazon is under investigation after ordering drivers to keep working despite a tornado.
With all this, you can expect shipping costs to continue to skyrocket. Learn more about what makes shipping so expensive and what to expect below.
1. Calculating Shipping Costs is Complicated
Nowadays, all it takes is a few simple clicks to order a package for delivery to your door. Despite that, a lot more goes into shipping your package than you might think. This process is what makes calculating shipping costs so complicated.
Here’s what impacts the cost of shipping:
- The size and weight of your package
- How far you’re shipping your package
- The speed at which you want your packages to ship
- Your shipping provider (USPS, FedEx, etc)
In general, it costs more to ship a big package fast and at a long distance.
2. It’s Always on the Rise
Have you noticed the cost of shipping going up and up? Food, housing, and fuel aren’t the only things increasing in cost each day. Shipping has also felt the impacts of inflation since the pandemic struck.
The pandemic isn’t the only reason shipping costs are going up, though. Shipping costs are always on the rise. In fact, they’ve doubled since 1990. On average, shipping increases in price by about 4% a year.
Shipping costs are always on the rise due to:
- Increasing demand
- Limited supply
- Increases in costs of fuel
- Increases in employment costs
- Carriers face transportation scarcity
- Changes in the economy
With that in mind, those forever stamps are a pretty good investment!
3. Demand and Expectations Are Increasing, Too
As explained above, increased demand is constant over time. Since the pandemic, that demand has gotten pushed to the limit!
Now, the global supply chain is showing signs of cracking.
Even some of the biggest companies, like Walmart, need help. That’s why they’re turning to third parties like D&H distribution. Other major shippers, like Amazon, are turning to independent contractors.
Either way, expectations are exceeding these businesses’ abilities to perform.
One potential solution is to look towards shipping technologies. Drones and driver-less cars are already getting tested on a mass scale.
Shipping Costs in 2022 and Beyond
So, what do you need to know about shipping costs as we head into 2022? You need to know that those complicated costs will only grow. You also need to consider how crazy demand is pushing the industry to the limit.
Things are likely to change soon. That could mean better technology (like delivery drones) or a forced demand decrease. This could happen if the industry collapses.
That’s not a likely scenario, though. So, what are your predictions for the future of shipping?
If you want to read more about these types of topics, then we’ve got you covered. Keep browsing through our blog now to find more of our favorite articles.