Will Shipping Prices Go Down in 2022?September 15, 2022 4:48 pm Leave your thoughts
We all saw a dramatic increase in the cost of goods during the COVID-19 pandemic and that rise was partly due to the fact that freight and shipping costs went up. So, what was the driving factor in the increase of costs? Put simply, supply and demand was the driving factor that pushed shipping costs up, and it is also what will likely bring them back down.
What Drove Up Costs?
There are a few different factors that helped to drive up the cost of freight shipping and the costs that any trucking company had to charge over the past two years. The main issue with cargo and the increase in cost is that the overall cargo space decreased while the demand to ship things increased. It was found that the cost of air cargo rates jumped by 80% from 2020 to 2022. Merchandise brokerage rates increased by 45%, full truckload and special truckload increased by 25%, and all other shipping rates increased.
The overall cost of shipping increased across the board, making it important for the cost of goods to go up to help compensate for the shippers losing money. The pandemic was the main cause for the increase in shipping rates as more and more people were buying online and buying items that were then delivered to their homes rather than going to the grocery store. You also have to consider that shippers were affected as well due to people not being able to work.
Will the Cost of Trucking Brokerage Go Back Down?
The prices are already starting to drop from what they were at the peak of the upswing, and they are going to go down more and more as the market starts to settle following the pandemic and the return of the workforce to their jobs. That does not mean that they will ever be as low as they were in 2019 before the pandemic. Though it might not seem like it now, prices are already falling and will continue to do so as supply and demand level out.
K-Way Express, Inc stays on top of current costs and market trends to deliver our employees and customers the best service we can. With over 700 carriers available, we strive to deliver raw materials or finished goods as cost effectively as possible, on time, and right to our customers’ doorsteps.