WICHITA, Kan. (KSNW) — Disruptions in the supply chain are causing shipping rates to soar. Economist Jeremy Hill said this is not surprising considering the many factors that are contributing to it.
“Inventories are slowing. That’s putting other pressures on products and goods and making costs go up,” said Hill.
Lack of product but high demand is just one factor. “Port closures that have also slowed shipping which then makes cost more expensive,” Hill continued.
The biggest factor affecting the market is energy costs, he added. “In general, energy prices are up around 23.6%.”
That impacts the whole process, including trucking, which is the primary system of shipping worldwide.
“We are now at an all time peak for trucking transportation costs,” claims Hill.
Mick Blackburn runs operations at Magill Truck Lines, a shipping company based out of Park City. He said one of his biggest struggles is finding drivers.
“They want a lot of money, and they want to get paid like they should be,” said Blackburn.
Magill’s drivers burn through a $500 tank of gas daily.
“Everything’s going up on us, your tires have gone up, fuel has gone up,” continued Blackburn.
So how does this affect Kansans?
“Some businesses already have built-in costs within the rates, and then they have to absorb the cost and shipping. Other companies, they just add that cost to the final consumer,” concluded Hill.
As for when prices may go down, Blackburn said he sees a long road ahead
“Everything’s all backed up, and they’re still waiting on that, so there’s no telling,” added Blackburn.