Shipping bottlenecks that have led to rising freight costs are cooking up a holiday headache for U.S. retailers as the holiday season approaches.
Last week Costco joined the long list of retailers sounding the alarm about escalating shipping prices and supply chain issues. The warehouse retailer was joined by athletic wear giant Nike and economic bellwethers FedEx and General Mills in raising concerns.
Moving a 40-foot container from Shanghai to New York cost about $2,000 a year and a half ago, just before the Covid pandemic hit. Now, it runs some $16,000, according to Bank of America.
In a conference call Thursday with analysts, Costco Chief Financial Officer Richard Galanti called freight costs “permanent inflationary items” and said those increases are combining with things that are “somewhat permanent” to drive up pressure.
They include not only freight but also higher labor costs, rising demand for transportation and products, plus shortages in computer chips, oils and chemicals and higher commodity prices, he said.