Are you hoping that the drop in oil prices will lead to a drop in the cost of shipping? Well, I hate to dash your hopes, but experts who study shipping trends say that’s not likely.
It’s getting a little crowded in here
It looks as though shipping costs will hold firm and probably increase. The healthy economy is spurring more commerce, and more commerce means more goods get shipped. Also, more companies plan to bring their manufacturing plants back to the U.S., which will create even more goods to move around. A third of companies that responded to an MIT survey said they were thinking about returning manufacturing operations to this country. The time it takes to get a product was their biggest reason for doing so.
Sources estimate that trucking rates will rise from 5 to 10 percent, and rail rates are expected to increase by around 5 percent as carriers struggle to handle increased demand.
Bringing it in-house
Companies are pushing back in several ways. In addition to moving manufacturing back home, a number of larger companies have created their own transportation fleets and some retailers and other firms are putting their distribution centers closer to customers so they can deliver on those promises of same-day delivery and, in turn, lower shipping costs.
It will be interesting to watch how the industry continues to evolve. In the meantime, we continue to maintain business relationships with all major shippers. Because of our shipping volume, we are usually able to negotiate better rates for shipping costs, which can be passed along to our fulfillment clients.
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