If there’s one thing that we’ve learned in 2020, it’s not to predict what will happen next. We’ve seen many unpredicted and unpredictable things happen this year. For businesses that sell products that are imported or exported, some of the changes have affected prices because freight costs have risen and are still rising. We wanted to give our customers a heads up that, due to an increase in freight costs, the prices of some products, specifically the ProDriveHD fasteners, will be affected, at least in the short term.
Factors Involved in Increasing Freight Costs
As with any other product or service, fluctuating supply and demand affect freight costs. Right now most of the available ocean freight capacity is being utilized. Because American consumer spending on imported goods has been and is high in 2020, space in freight containers is very tight. Demand is expected to remain high into the new year as consumers who are at home are spending more on goods and far less on services.
In China and India specifically there are large backlogs of bookings. Companies are waiting long periods of time for space in containers for their goods. Carriers are charging premiums for storage space, and freight rates are unusually high. Rates for air freight are also rising as we enter the holiday season and companies buy up space in anticipation of fourth quarter spending.
As of November 1, 2020 General Rate Increase (GRI) has been filed for all cargo imported from Asian ports of loading, to ports in the United States, Canada, and Mexico.
When products arrive here in the United States, there are further congestion problems, unfortunately. Most major American and Canadian ports are clogged with already shipped goods, especially on the West Coast from Los Angeles to Vancouver. On the East Coast, it’s not much better. There are vessel berthing delays, terminal operational delays, chassis shortages, and full warehouses preventing more goods from coming into the country.
Once goods are unloaded off freight containers, it’s challenging to find truck power to ship them from the coasts to elsewhere on the continent. Right now trucks are booked for 1-2 weeks in advance. As a result, trucking rates are also surging.
We are living in uncertain times with the COVID-19 pandemic and the upcoming U.S. election, among other potential disruptions, so it’s impossible to predict what freight costs will look like in the following months. The cost of imported products, including ProDriveHD fasteners, will increase due to freight costs, at least temporarily. We at Bond Products would like our customers to know that we always offer the most competitive prices we are able on the products we sell. We are proud of the quality of our product lines. If you have any questions about products or products costs, call us at 1-888-800-BOND. We will be happy to answer any of your questions.