Freight Gone Wild

Freight costs have been extremely volatile, mostly in the increasing direction. Here are a couple of factors:

- Believe it or not, there is an equipment imbalance with a shortage of containers for export. With the weakness in the US economy and weakness of the US dollar, exports are surging while import growth has slowed. Any imbalance causes increased costs for carriers as they must move equipment around. This eventually gets passed on to shippers.

- Fuel costs - no need to say any more about this

- Overcrowding of US ports on the West Coast

- New security requirements

- New environmental regulations. One interesting one is the new California rule that trucks made before 1988 will no longer be able to carry freight from ports. This raises costs as trucking companies need to replace equipment.

So, freight in both directions is getting more expensive. Hopefully this is the peak of costs and we can see some relief in the future.