Room For Innovation As Shipping Costs Soar

With Fuel Surcharges Rising, Companies That Depend On Shipping Are Suffering

(CBS)  There's a lot that goes into shipping a box of Harbour House crabs.

And these days, a lot more money goes into it too, as owner Curt Engle learned when his Federal Express rates shot up $35 a bushel, CBS News transportation and consumer safety correspondent Nancy Cordes reports.

"The first thing I'm doing is I'm calling my FedEx rep and saying what's going on?" he said.

Since April, FedEx has raised its fuel surcharge from 18.5 percent to today's 34.5 percent. That's as it copes with a 54 percent hike in the cost of fueling its own trucks and jets.

UPS has seen the same rate hikes. Now it's trying out new GPS devices that allow cargo planes to make more direct landings.

But that saves just $200 a flight. For the shipping and trucking industries, which run on fuel, there are few ways around high oil prices.

"A container coming from China to L.A., the price of that container has gone up by close to 50 percent in the last five years," said Hamid Moghadam, CEO of real-estate developing corporation AMB Property.

Diesel prices have driven an estimated 45,000 big rigs out of the business just since last year. Trucking companies that used to cap speeds at 68 mph are slowing down to 60 to save on fuel.

Wal-Mart wants to give the nation's first hybrid big rigs a go.

"From a driver's viewpoint, there's really no difference," said Bill Jackson, the general manager of Peterbilt. "They push on the throttle, it goes; they step on the brake, it actually powers it back and charges the batteries."

Today's higher shipping costs mean higher prices - for everything. Engle has had to raise his - and says sales volume is down about 20 percent.

"Is it tough for you to decide how much of that increased cost you're going to pass along to the customer?" Cordes asked.

"Well we obviously have to pass along some of that cost. Because we can't eat that cost," he said.

Thousands of businesses just like his are feeling the same pinch.

[toolmangler-2009]

What I''''d like to know is why is diesel so expensive these days? It doesn''''t take near the refining as gasoline and as I recall, it used to be quite a bit cheaper than gas... not more expensive as it is today. That''''s why everyone was buying diesel cars years ago. What happened?
Posted by WogerWabbit at 12:43 PM : Aug 13, 2008



It really has nothing to do with ''Oil''. It has to do with "Globalization" and ''One World Government''. These things cannot come to be without the wealthy countries being brought down and the poor ones raised up. Americas economy has to crash. China is on the ascendancy. All of this would have happened anyway but ''The Powers that be'' are in a hurry for it to happen on ''their watch'' while they are still around to see it.

[wogerwabbit]

What I''d like to know is why is diesel so expensive these days? It doesn''t take near the refining as gasoline and as I recall, it used to be quite a bit cheaper than gas... not more expensive as it is today. That''s why everyone was buying diesel cars years ago. What happened?

[bm6005]

The problem is the mental midget MBA''s don''t include shipping costs in their analyses of total landed cost. When you add that in there is no great cost advantage to going overseas for a lot of items that went offshore. Just like law schools, all MBA programs need to be shuttered for 50 years!!!

[oneworldusa]

Think of all the fuel being wasted shipping goods from overseas. It is un-American at this time to purchase any goods from overseas unless absolutely necessary, and that, unfortunately, is because so much comes from overseas these days that options can be slim. However, buy American when you have the choice, support our own economy, and if enough people do this long enough, we will save thousands of gallons of fuel daily and bring back jobs.

[oneworldusa]

Posted by hypnotoad72 at 09:59 PM : Aug 12, 2008

-That''s what I''ve been saying for months. It costs $15,000 more per cargo container to ship overseas than it did a few years ago, according to one report.

[whitemale08]

Look folks,

the only way to end the hyper-inflation in all of these costs is to end the war in Iraq.

Critics tried to warn you Republicans but you didn''t listen.

"defecits do matter".

[leesmithjr]

Put sails back on cargo ships.

[hypnotoad72]

Which means it might eventually be cheaper to put manufacturing jobs back in the US?