Shipping Costs Are an Important Part of Many Business Pricing Plans

Written by Small Business Magazine on June 8, 2018. Posted in Air and ocean logistics, Purchasing agent agreement, Purchasing agent job

You might be in the middle of summer, but the retailers around the world have already made their plans for not only the upcoming Christmas, but for next summer as well. Much of this planning is done in advance so that the prices of these products that will be on the shelves next winter do not have to reflect the highest of sea freight shipping fees. Including all of the costs of door to door transport and the price of the manufacturing, retail companies plan for months, sometimes years, in advance to know what the retail price should be.

Air and ocean logistics are a significant part of the price that we pay for anything that we buy. In fact, the cost of sea freight shipping is a determining factor in everything from that small spinning toy that everyone wanted a few Christmases ago to the whatever this year’s new holiday hit will be.

As the President threatens and partially enforces the threat of trade wars with other nations, it is not only retail warehouses that may be affected, it is also the price that every consumer will pay when they walk into their favorite store to make a purchase. Consider some of these facts and figures to understand the scope of the impact that shipping prices of different types of freight play in not only the nation’s, but the world’s, economy:

  • Due to the fast and effective transportation, point-to-point transportation decreases the amount of traveling time needed.
  • Ensuring a higher quality product delivery, the short transportation time air cargo provides decreases the risk of damage to products.
  • The air cargo industry generated an estimated $75.4 billion in revenue by the end of 2013, according to IBIS World research.
  • Cargo only aircraft handle an estimated 60% of global air-freight shipments in 2012, according to the plane maker Boeing.
  • In addition to the significance of the sea freight shipping industry, cargo airlines are also dedicated to transporting cargo both nationally, and internationally.
  • In fact, the global aviation industry transported an estimated $6.4 trillion worth of cargo in 2012.

When you get ready to make your holiday shopping list for next year you might feel like you have a real jump on things and that you are super organized, but the fact of the matter is that the retailers have been planning for much longer. Transport direct door to door costs can initially seem overwhelming, but with advanced planning you can make sure that the costs can more easily be absorbed in the prices of the goods that consumers most desperately want.

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