same 2020 week with a 119 percent increase. The situation at sea may be calmer, but intermodal freight rates haven’t stopped escalating. Within the U.S. alone, the cost of transporting and warehousing goods posted record annual gain, soaring a record 18.3 percent year over year on Nov. 30, the largest jump since 2009, according to the U.S. Labor Department. Brands like Crocs, Adidas, Wolverine Worldwide and countless others relied more on air freight this holiday season to get products to the consumer quicker. Unsurprisingly, across all major transatlantic flight patterns, the Baltic Exchange Air Freight Index (BAI) indicated that air freight rates peaked during the holiday season, unlike their ocean counterpart. Air freight rates jumped 63.1 percent on a year-over-year basis to $5,254 per shipment on Dec. 13, and inched up 23 percent since Nov. 1 alone, when the per shipment total was $4,247. Air freight shipments have since fallen off as the season came to a close. But
even with the latest BAI data on Jan. 3, 2022, air freight rates are still up 43.8 percent from their totals last year. In total, Salesforce estimated that the combination of the logistics and labor costs alongside inflationary pressures would increase the total cost of goods sold from U.S. retailers and brands by $223 billion, forcing end prices to go up as much as 20 percent. Data across products in fashion, furniture, health and beauty, bed and bath, and electronics suggests the fourth-quarter costs didn’t quite reach that high, but were still substantial. Krish Thyagarajan, president and chief operating officer of retail data analytics firm DataWeave, told Sourcing Journal that average MSRPs across items studied at Amazon and Target were up 15 percent from the year-ago period. The costs associated with raw materials were even higher than anticipated in 2021, with base cotton in the U.S. costing $1.09 per pound for the week ending Dec 30, 2021, according to the U.S. Department of Agri-
2020
CHANGE IN U.S.-BASED TRANSPORTATION, WAREHOUSING COSTS (YEAR OVER YEAR): NOV
1.1%
DEC
2.2%
JAN FEB
2021
MARCH
3.1%
5%
7.6%
APRIL
10.7%
MAY
14.4%
JUNE
15.1%
JULY
AUG
14.9%
SEPT
14.5%
16.7%
OCT
17.9%
NOV
18.3%
Source: Bureau of Labor Statistics
13 / 2022 SOURCING REPORT