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If you’ve seen higher than expected freight rates, we hear you, we see you. There’s a couple of potential factors for these increases. Since Q2 of 2020, the freight markets have shown robust growth, which has raised rates dramatically. While this is good news for carriers and manufacturers, it has caused CPG shippers to pay the price in rising freight rates. In this week’s blog, our team analyzes the various factors that are driving up freight rates and why they are happening.

Factor 1 | Port Congestion 


With pandemic-related consumer shopping habits, many West Coast ports operated at maximum capacity during the summer. In 2021, the uptick in imports has compounded the situation and caused even more congestion. March retail sales increased by 9.8% sequentially and 14.3% year-over-year. A 27.7% jump led to an increase in sales of food services. With more imports on board, shippers should brace for capacity constraints. As the produce season gets underway, rates will also rise.

Factor 2 | Produce Season


The start of the produce season typically occurs in February in the southern US. By spring/summertime, it has reached the majority of the US. During this time, capacity is tightened as refrigerated carriers dedicate a lot of their space to hauling produce. Other products that can ship via dry van or on refrigerated trucks will move to van transport, thus increasing freight rates across the board.

Factor 3 | Reliance on Split Shipments 


eCommerce brands have been comprehensively using split shipments for years. Firstly goods need to be picked from inventories across different locations. With not enough room on a single truck or plane for an entire shipment, it may have to be divided into individual boxes and delivered individually. Split shipments happen to occur even more often during cross-country or international shipment of goods. The more the shipments, the costlier the shipping costs; therefore, the trend ends up being a pricey affair and often harmful to the shipping ecosystem.

Counter Rising Rates with these Techniques: 

Advance Planning


One of the most effective ways to combat these high freight rates is planning shipments far in advance. Cargo cost is increasing every day. To avoid paying surged charges and avail early bird facilities, companies have to plan their shipments well in advance strategically. Working with a team of transportation experts (Like Taylor) that uses digital platforms to leverage data on the freight costs to predict rates and trends affecting the rates will help to plan and lower costs. 

Work With A Team Of Experts

Work with a dedicated logistics team to ensure conditions do not endanger profitability. Teaming up with a partner like Taylor can help your organization correctly forecast costs and find more favorable pricing through consolidation or mode optimization services.

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Operations, Packaging, Retail, Third Party Logistics, Value-Added Services, Warehousing

This year is already shaping up to be a bit more “normal” than last but, there’s still a lack of in-person events, gatherings, sports, etc. In place of these events, we as a society have had over 365 days to come up with imaginative ways to engage with an audience that would typically be face to face. One creative solution is this idea of sending over a promotional kitted masterpiece; please don’t let the word promotional or promo deter you; we promise this isn’t another popsocket or portable charger that isn’t compatible with your phone. It’s much more extravagant than that; it’s unboxing a complete experience. This could be anything from a virtual reality headset to an HDMI that you plug into your TV to a cocktail creation kit (alcohol included, don’t worry). You’ve probably seen influencers on Instagram and TikTok open up the most outlandish PR gifts; the sky is truly the limit when it comes to these things. And while we aren’t the brains behind coming up with these deliverables, we are the brains behind making the experience come to life through kitting. You send us the items, boxes, bows, cards, confetti, and we’ll package it up nice and neatly and send it wherever you need to go. Have an idea but not sure what packaging or materials are necessary to make it happen? We’ve got you. Our team partners with an incredible sustainable packaging company that can make all your parcel, corrugated cardboard, dreams come to life.

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CPG Brand eCommerce

Noelle and Chris are back on the pod talking all things grocery and CPG trends. From which pandemic-related consumer behaviors are temporary vs. here to stay to the future of national grocery chains. Not to mention they talk groundhogs (yep), Kim Kardashian, and the NY Mets. Want to be on the next episode or have a topic you like us to cover? Inbox us at info@taylorlog.com

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