Operations
March 31, 2022

The future of shipping: Are high costs here to stay?

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Over the past year, there’ve been some massive changes in shipping, logistics, and the global supply chain. Clearco sat down with two expert partners in e-commerce fulfillment to dig into what founders can expect in the future of shipping. With the help of Deliverr and Whiplash, we’ve uncovered two points of massive disruption about to shake up the antiquated shipping, logistics, and fulfillment industries. 

To preface this conversation, you may ask what exactly is driving prices up around shipping?

When asked, Johnny Craddock, Director of Transportation at Deliverr, sighs and says simply, “The challenges in the industry are quite complex.” 

It’s no secret the cost of shipping is expensive and has steadily risen over the last number of years. Sean Kim, Vice President of Experience & Parcel Strategy at Whiplash, informs us, “The biggest factor in rising shipping costs is inflation. Inflation affects everything from the cost of the driver to those managing the drivers, and the cost of fuel which of course, climbs higher every day.”

He explains that COVID-19 hit the shipping and logistics industry particularly hard. Its effects have snowballed and are likely to continue.

As you already know, massive driver and labor shortages plague the industry. But then there are the other activities stemming from the pandemic, like government bailouts, causing prices to rise. In short, all of these activities have driven higher costs on everything—commodities and goods alike.

But this isn’t just a “blame the pandemic” situation either. Craddock notes:

“These impacts have always been present to some degree, but never before have all cost components moved higher in unison for such a prolonged time period.”