While fuel prices do contribute to transportation costs, the primary driver of high shipping costs is supply-side market constraints, including capacity contractions over recent years, rising barriers to entry, and insufficient truck availability, rather than fuel price increases alone.
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Fuel Prices Aren't The REAL Reason For High Shipping Costs!Añadido:
It's like everyone thinks the fuel prices, and that's the easy answer to state, and it does have an influence. It's not nothing, but you and I both know, having worked in the space, that oil prices did not send transportation prices into the into the stratosphere.
The market was tightening in Christmas, and then it stayed tight as we had winter storm Fern, because we had supply side issues, contractions. You know, we had a lot of capacity coming offline over the last 3 years because of the challenging environment. And then the barriers to entry started creeping a little bit higher with some of the, you know, non-domiciled stuff that we've talked about in the past.
And now we're in a market where we don't have enough trucks. And then the oil story on top of that is also an inflationary pressure, which is push helping keep rates higher, but it's not necessarily the big story or why it costs more to have produce shipped to your your stores.
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