What you need to know about freight and shipping in 2022
Freight and shipping in 2022
Freight and shipping have suffered significant setbacks and complications over the past two years thanks to the massive growth of online shopping and disruption of global supply chains.
As Covid outbreaks settle, the fallout remains. Here’s the good and the bad news and what you need to know if your business ships goods to customers.
Restrictions are lifting
Both 2020 and 2021 saw border closures and stay-at-home orders, resulting in a difficult situation caused by a lack of drivers, major delays on the roads and increased online ordering.
With mask mandates and lockdowns easing, Australians are heading back to the shops. Freight companies are also able to look overseas to find drivers to keep goods moving. In addition, traffic is flowing much more freely across borders (weather permitting).
These reasons should combine to ease some of the pressure on Australia’s stressed delivery network.
However…
Fuel costs are rising
Australians are seeing a pinch at the pump for a few different reasons.
The initial drop in demand for petrol during lockdowns resulted in cheaper fuel and a slow-down in production. We are now seeing the effects of that slowdown, with less fuel available and prices rising.
High fuel prices always impact freight and shipping. As a result of the latest jump at the bowser, many businesses that have offered free shipping in the past are no longer able to absorb the costs of sending products to customers.
Conflict in Eastern Europe
The current unrest in Eastern Europe has markets nervous. Russia is a major world supplier of fuel, and trade embargos and other restrictions may start to limit fuel supply even more.
Conflict always disrupts the stock market, and only time will tell the long-term ramifications of the troubles between Russia and Ukraine.
While Australia doesn’t rely on Russia for fuel, the flow-on of the conflict is sure to be felt across global carriers.
Global shipping delays
As a retailer, you have providers of your own. Right now, you need to be aware of timelines and the factors causing delays on the products you need.
It’s a good time to buy local if you can, in order to avoid getting caught up in international shipping backlogs. The other important strategy is to work with providers that keep you well-informed, and do the same with your customers.
Optimising your freight solutions in 2022
If your business relies on shipping, there are a few systems you can put in place to manage the current situation:
- Use cost-effective freight solutions: Don’t pay more than you have to for your freight. Find the right company for the needs of your business.
- Compare suppliers: Put your suppliers to the test. See how they compare to each other and don’t go with one simply because that’s what you have always done.
- Source what you can locally: For those who can, sourcing locally can save considerable amounts on fuel and deliveries.
- Give your customers options: Customers appreciate being able to choose the option that suits them best. You can consider providing slower delivery for lower prices, or add a premium for those who need faster shipping.
- Review your own prices: You need to find a way to absorb the increase in shipping costs, whether it is by increasing the cost of shipping or increasing your overall prices. Think about ‘sweeteners’ you can offer, such as $10 off your next purchase for customers who come back.
- Get professional help: Shipping is complicated but you don’t have to figure it out on your own. Work with a consultant who has an in-depth knowledge of the industry and first-hand experience to minimise your shipping expenses and ensure your deliveries arrive on time.
Want expert advice for smarter, more cost-effective shipping? Contact Shipping Smarter today.