We are seeing transportation and logistics recover from backlogs of goods coming to the U.S. return to healthy pre-pandemic levels which is good news. Unfortunately, for the customers, this does not mean that prices of goods will be slashed anytime soon. It is still very costly to have items shipped. “Short-term prices for containers from Europe to the US East Coast are still more than double what they were in late-2019,” according to data from Freights Ltd. Shipping rates are still well above pre-pandemic levels and companies still have to be careful what they are charging in order to achieve their sales goals. These shipping and logistics companies only change their prices a few times a year so it is tough to tell when this will be going down, if any.
Another factor that is hitting the supply chain hard is labor shortages and wages. Storing goods in warehouses requires a lot of labor. Also, training of new employees due to turnover accounts for more resources along with paying them higher wages. In addition, warehouse storage prices continue to grow. The storage prices are not coming down either. With all these additional costs, we won’t see the prices of goods come down until well into 2023 or well into 2024. There has been some relief, however, it will take some time to work its way through the supply chains and down to the prices of goods.
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Supply Chains Have Healed Yet Their Mark on Inflation to Endure (wealthmanagement.com)
About The Author: Jeff Dervech
Jeff Dervech is a Tampa local commercial real estate agent, specializing in the arena of retail strip center and shopping centers.
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