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Will retailers win now and lose later with long-term shipping contracts?

October 7, 2021


Supply chain disruptions have plagued the U.S. retail landscape in recent months, raising concerns that Christmas shoppers will be met with stock outs rather than gifts when the holiday season gets under way. Some major retailers have been trying to circumvent international supply bottlenecks by contracting with overseas shipping companies, but the terms of the deals are not always a bargain.

Long-term shipping contract prices have more than doubled since this time last year, according to an article on Quartz. Even so, the long-term contracts tend to be cheaper than one-off “spot rate” fees retailers have been incurring to get product shipped at the last minute. Experts are concerned, though, that the long-term contracts will lock in retailers to pay more after overseas shipping costs have normalized.

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