CATCH THE BUZZ

Transportation costs to rise further

From Kiplinger News

Despite lower fuel prices next year, truck shipping will cost more for most businesses in 2009 than this year. Rate hikes of 8% to 9% will hammer firms, as the environment shifts from a buyer's market to a seller's market. Sluggish business demand throughout this year has kept rate hikes to a mere 2%, but it's also shrinking the trucking industry. About 3500 firms will shut down, while others are curtailing operations, with many even selling off some of their big rigs to buyers overseas. As the economy starts to pick up in coming years, capacity will be strained.

For Almond Pollinators, this will affect the metric of hauling bees to California. With diesel prices likely to remain over $4 a gallon (though averaging about 15¢ a gallon less than this year), hefty fuel surcharges won't disappear. In fact, some bee haulers may be addiing extra fees for shipping costs onto their invoices: Dow Chemical, for example, is adding a $300 charge for each load it ships to customers by truck and $600 for each load it transports via rail, regardless of the cargoes' weight. Others are simply boosting their prices wherever possible. The trend spells higher inflation in wholesale prices and tough times for those close to the top of the supply chain. Super-intense competition for consumer dollars means that retailers, auto and appliance makers will be unlikely to pass along increased freight costs to their customers.

As far as honey is concerned, now at about $9000, the typical cost of transporting a cargo container from China to the U.S. is three times what it was in 2003. The ocean freight cost adds the equivalent of a 10% duty to the price of goods imported from China and other Asian nations and nearly as much on cargo from Latin America, eastern Europe and the Mideast.

Domestic food retailers are accelerating a shift to local produce and other products to counteract escalating costs for ocean or air freight shipping. Out-of-season fresh flowers, fruits and vegetables such as Peruvian roses, Chilean grapes and sea bass, Belgian chocolates and Australian apples and Argentine honey won't disappear from supermarket aisles: American consumers are too used to getting favorites year-round. But they'll be less common and pricier.

This message brought to you by Bee Culture, The Magazine Of American Beekeeping   www.BeeCulture.com

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