Freight makes up about 9% of the Australian economy. That does not include much of the last mile delivery costs.
The problem of deliveries delays is something we all have experienced and talked about here.
What is also shocking is the increase in the cost of freight. If you are in a low margin industry like ours and many of you are, it does not take much of an increase to destroy your margin.
Here is a chart of costs what we are looking at now for freight.
I circled in red, what happened since the pandemic hit. We are looking at a now a 30% increase. Is it stabilised or going up, who knows, but it is no wonder that all these experts are concerned.
The big issue with most of my clients is not whether it goes up but whether it goes evenly up. The fact is that in crisis, it never does. As such, the guy up the road might have the same item much cheaper. Some suppliers are idiots, one thing I have learnt over the years, is never overestimate the intelligence of a person with a billion dollars. Some suppliers have long term contracts in place. Many do not. Some have large stock they need to get rid of sitting here while again many do not, etc., etc.
What I do know is when a crisis happens, it pays to shop around. For example, I have grabbed some scanners at an excellent price if you are interested, click here,