Enemy

Colorado Springs CO

Description

Cost of shipping container from China to US hits record high in September. According to the Freightos Index, the median cost of shipping a standard rectangular metal container from China to the West Coast hit $20,586, nearly double what it cost in July, which was twice what it cost in January. The rising shipping costs, in combination with unprecedented supply chain challenges and high demand, have forced some companies to take matters into their own hands to ensure they have the products they need in a timely fashion. Last week, Costco said it would limit purchases on bath tissues, roll towels, Kirkland Signature water, and high-demand cleaning products related to an uptick in coronavirus cases. Chief financial officer Richard Galanti estimated on the company's fourth quarters earnings call that overall price inflation for its products is now in the range of 3.5% to 4.5%, up from the previous quarter's estimate of 2.5% to 3.5%, and that both Costco and its suppliers are paying two to six times more for containers and shipping. In addition to placing its orders earlier, Galanti said Costco would charter three of its own container ships to transport goods between Asia and North America. Each ship will carry about 800 to 1,000 containers at one time, and the company plans to make approximately 10 deliveries over the course of 2022. Meanwhile, other companies are passing on the cost burden to the consumer in the form of price increases.