As the West Coast Ports continue to clear out the backlog of containers, organizations of all sizes should expect to face increased shipping costs from carriers.
The transportation industry frequently experiences supply and demand waves. During the recession, many organizations either could no longer afford to ship freely or closed their doors completely. Due to the low demand, carriers were forced to dramatically lower prices, simply to be able to fill their trucks. However, as the economy began to recover, shipping rates also leveled out. Similarly, the West Coast Port congestion, combined with harsh winter conditions, has led to another wave in pricing.
As the West Coast and other ports continue to clear out months of backlog, businesses across America struggle to get shipments delivered on time. The carriers have realized this need. Since they have the upper hand in the situation, the increase in demand for truck space has led to an increase in transportation costs. Unfortunately, this wave will affect anyone shipping.
While no organization can avoid the raise in shipping costs, there are ways to help ease the pain. Partnering with a 3PL can offer more flexibility in both modes and pricing. Due to their large network of carriers and longstanding relationships, a 3PL is more equipped to find carriers that offer competitive pricing, without sacrificing service. Another benefit of working with a 3PL is their experience and knowledge of alternative shipping modes. Often they can help create a customized solution, tailored to your needs, without losing out on competitive pricing.
The 2014-2015 winter season has been rough, effecting all organizations in many ways. Unfortunately, all businesses can expect to start seeing spikes in carrier pricing that will last until the ports return to normal operations. However, keep in mind that there are options to help maintain service and reasonable costs.