Shipping Delays and Higher Rates Get Small Business Jammed

Shipping Delays and Higher Rates

Long waits for merchandise deliveries and crippling costs are hobbling the efforts of small and midsize businesses across the U.S. to benefit from the economic recovery after a difficult year.

With retail giants like Walmart Inc. and Inc. rushing to restock to meet booming demand from U.S. consumers, smaller competitors are battling over dwindling cargo space on boxships coming in from Asia. Those who want immediate shipments often must pay about three times the going freight cost, according to brokers and cargo owners.

Shipping Delays and Higher Rates
Shipping Delays and Higher Rates

Shipping delays and high freight rates are among several challenges facing American businesses, which also are dealing with rising costs for products and a shortage of available labor. These factors weigh especially heavily on small businesses, which tend to have fewer resources to absorb price increases and less leverage either to negotiate lower rates or pass along the higher costs to customers.

Things aren’t expected to get better in the near term. Container ship operators say retailers started booking cargo space for year-end holiday merchandise in June, three months before the start of the traditional peak shipping season.

“We don’t see demand going down at all,” said Narin Phol, managing director for North America of Danish shipping giant A.P. Moller-Maersk A/S, the world’s biggest boxship operator. “Everybody is concerned about the peak season.”

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