When doing your due diligence on which Roll-Up Door manufacturer is right for you, there is no doubt that you will run across a variety of freight prices when reviewing quotes. Why is it that the price has increased so much over time? What factors are driving this difference? In the spirit of helping you be the most informed buyer possible, we asked our in-house experts for their insights into what is going on. Let’s dig in.

Fuel Costs

Given the current rising costs of fuel for people across the globe, this tends to be top of mind, and for good reason. Of course, we know that there is some sticker shock for everyone when they go to the gas pumps, and in some cases are paying over 2x what they were just a few years ago. But unfortunately, this same sticker shock directly contributes to rising commercial freight costs.

Since the start of the pandemic, shipping rates have skyrocketed. While, as of recently, we are starting to see a stabilization of rates, the rates that we are settling at have been as high as 400% higher than pre-pandemic levels. These higher rates lead to increased fuel surcharges and a need for drivers willing to operate under less profitable conditions. All of the aforementioned factors force carriers to raise their prices to avoid taking losses that would crush their business model.

You can see for yourself the rise of diesel according to the Federal Reserve Economic Data (FRED) below:

‍

‍

Freight Demand

There are a host of components to the demand of freight. As experienced over the past two years from the pandemic, we saw global supply chain disruptions that led to times of less demand and then times of peak demand once things were resolved. But, of course, in most cases, you cannot wait for a drop in freight demand to occur for you to start your order process, so it can be very challenging to avoid this price increase when it happens.

Other factors mainly out of the consumer’s control are seasonality trends and the supply of active drivers. As previously mentioned, there are times when drivers are not operating due to market conditions which then forces a premium on price. However, in line with the principle of supply and demand, these conditions are always temporary, and the market will eventually re-enter a level of equilibrium that works for everyone.

Commercial Driver Labor Market

One element in the discussion around freight prices that has been highlighted in recent years is the commercial driver labor market's impact in times of shortages or surpluses.

Over the past decade, we have seen fewer new drivers enter the labor force. The ones staying are growing closer to retirement, and the ones that decide to call it a career should be replaced at a higher rate by the younger generation. But instead, while the youth is joining the logistics industry, they are opting for warehousing over driving.

The notorious work-life balance struggles of people that work in the commercial driving industry are also something that has been a hard sell for trying to recruit new talent. So much of the demand is for the long haul, which leads to less time at home with family and friends. While this lifestyle works for many currently operating, more is needed to meet the increased demand of an ever-globalized market.

This information may come as little surprise, but the recent pandemic exacerbated these issues and has left a lasting impression on the costs for consumers that does not have a clear solution in sight.

Geopolitical Landscape

In current times, we are seeing the effects of how geopolitics come into play regarding shipping costs. The two prominent players that have had the most recent impact are OPEC and Russia.

OPEC recently decided to take the side of Russia in the face of its conflict with Ukraine. In October of 2022, OPEC announced that they would cut oil production and, in turn, cause an increase in the cost of oil globally. This was largely thought to be a financial attack on the West.

Russia is also a major player in the energy sector, where most of its GDP comes from natural gas and oil exports. However, the sanctions from the United States and NATO against their exports have hurt Russia's economy and led to increased energy prices that are driving increased shipping costs.  

Given that there has not been any resolution to any of these globally significant events, it is likely that their effects of them are here to stay for some time. Therefore, it will be essential for consumers to focus on efficiency to minimize how much this impacts the profitability of their businesses.

Overall Size of Your Roll-Up Door Project

Larger order sizes can reduce the price of your freight versus those with smaller or more sporadic orders. But, more than just a price reduction, it does lead to more efficient use of your shipping dollars. This is because you only have one shipment compared to filling out the truck is directly tied to getting your money's worth. For example, sending out one truck with ten pallets is far more efficient than shipping out two pallets every two days.

Another factor to keep in mind is your lead time. If you are ordering something last minute, shipping options are more limited and will likely be higher than if there was a longer runway for the manufacturer and carrier to find the best solution. Before starting your quote process, be sure to know the total needs for your project/facility as close as possible to ensure you are staying as on budget as possible for your company.

Government Regulations (State/Federal)

Less in the headlines, but still a significant factor in the rising prices of freight is federal regulation. The Department of Transportation (DOT) is responsible for planning and coordinating state-level transportation projects. It also sets safety regulations for all major modes of transportation. The regulations they put in place can force carriers to make equipment adjustments, update labor standards, or change a business process that directly affects their bottom line.

At the end of the day, these increased costs to the business are passed down to the consumer. Since each state is very different regarding how much oversight its DOT has, we will not delve into them.

At the federal level, the United States Department of Transportation is tasked with protecting the public by maintaining the safety and security of our country’s transportation system. They report directly to the President of the U.S. and are represented in the President’s cabinet. In 2022 alone, the USDOT has passed various pieces of legislation in the spirit of safety and simplifying the system to try to do its part in reducing the unnecessary cost to carriers.

SteelBlue’s Take

As you can see, the price on your invoice for freight is the product of factors that come with many complexities. You can offset some that are primarily out of your control. Remember to take matters into your own hands and do what you can to ensure that your order is shipped as efficiently as possible by calculating the exact needs of your build before working with a Roll-Up Door manufacturer.

We want to give special thanks to our in-house subject matter expert, Sydney Hogan, who contributed to this article, and we hope that you found it helpful as you explore the best options for your firm. Please reach out to our team here if you have any questions about the right path for your build.