Two state-owned companies in northeastern Ohio are part of this look from the Wall Street Journal to how rising shipping costs have become the “latest corporate inflation conundrum”.
As the article notes, “Transportation costs – usually a fraction of the price of a finished product – appear to be another barrier to the supply chain, crushing some companies who already pay more for raw materials and labor. -work “. The pandemic “has resulted in a lasting increase in transportation costs, putting pressure on many companies already facing higher wages and raw material prices,” the Journal reports, and some CEOs “say they expect at high freight costs until 2023 â€.
The main story comes from the Hudson-based fabric and craft retailer Joann inc., which “said it spent 10 times more than its historical cost in some cases to move products from one point to another,” the Journal reports.
“Sometimes ocean freight is actually more expensive than the cost of the product,†Joann CEO Wade Miquelon said in a recent interview. The company hasn’t raised any base prices and hopes the additional supply chain spending will be temporary. “I think they probably are, but does transient mean six months or 24 months?” He told the newspaper.
The Journal notes that the Orrville-based company JM Smucker Co. “Transportation costs have recently been reported as a major reason for declining profitability, along with higher commodity costs. “
Smucker’s CFO Tucker Marshall said in late August that transportation costs were a challenge in the last fiscal year which has continued into the current year.
“As you bring in material, produce and ship material, the entire network is affected from a transportation standpoint right now,†Marshall said. “And that’s material.”