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Supply Chain Price Hikes – What We Know

Over the last couple of years, the world as we knew it turned a corner. With the ongoing pandemic still very much apparent and all around us, it seems some of what we knew will never return. Changes in the way we interact, do business and travel have all been affected and the necessary adjustments have become the new norm.

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Inflation & Shortages

In October 2021 consumer prices were recorded at 6.2% higher than the previous year. Inflation started to rise early in the year due to several circumstances. Consumer demand was through the roof, with many turning to eCommerce as a solution to being locked down. 

Supply chains were hit hard during the pandemic. Every step of the way staff numbers were down. Coupled with the huge surges in demand, shortages in warehouse staff, drivers, airports and docks workers all contributed towards a rise in charges.

Oil shortages have led to an increase in fuel prices, although oil producing nations increased production to help dampen the rises. Microchips have also been in short supply affecting the motor industry resulting in price hikes for new cars amid shortages. Lumber mills, production of rubbers and resins have all fallen victim to labour shortages, and in turn, increased prices.

These charges of course trickle down to the consumer and the end price of goods in nearly all sectors have increased. The unprecedented rate of inflation although now expected to level out is not predicted to drop back down for the foreseeable future.

Supply and Demand

With demand increased and availability low, some suppliers take advantage of the short supply of goods to implement increases. The unusual benefit to this is, suppliers and consumers alike shopping around to find better prices, this helps to promote and boost market underdogs. By doing so, a more competitive market can be created.

 

Prices in the logistics industry are heavily dictated by the price of fuel. With the logistics industry the backbone of supply chains, the ramifications of increases are felt across the board from manufacturer through to consumer. 

For the logistics arms of the supply chain, we continue to do what we can to reduce the price for our customers. At OCS our low international delivery charges and free returns help keep us competitive and reasonably priced. You can get a spot rate request from us by following this link.

To view a full list of our services, you can follow this link.