Shipping expenses have surged in recent years, leaving many wondering about the reasons behind these escalating costs. From global supply chain disruptions to rising fuel prices and labor shortages, multiple factors contribute to the increased cost of shipping. Understanding these elements can help businesses and consumers make informed decisions and identify opportunities to save.
Factors Driving Up Shipping Costs
Global Supply Chain Disruptions
The COVID-19 pandemic caused significant disruptions in global supply chains, leading to challenges such as port congestion, misrouted goods, and the closure of key shipping routes due to geopolitical tensions. For instance, attacks in the Red Sea forced vessels traveling from Asia to Europe and the U.S. East Coast to take longer, more expensive routes around Africa. Additionally, droughts affecting the Panama Canal—a critical passage for about 40% of U.S. container traffic—limited the number of goods that could be transported, further exacerbating delays and increasing costs.
Rising Fuel Prices
Fuel is a significant operational cost for sea, land, and air transport. Between 2022 and early 2025, global oil price volatility, influenced by geopolitical events and OPEC+ actions, led to increased transport fuel costs. For example, rising crude oil prices elevated the cost of refined fuels like marine Very Low Sulphur Fuel Oil (VLSFO), directly impacting shipping companies’ operational expenses.
- Trucking: The U.S. trucking industry, heavily reliant on diesel, experiences fluctuating operational costs with changing fuel prices. These changes often manifest as fuel surcharges passed on to shippers and consumers.
- Rail and Air: Rail freight and air cargo operations are also susceptible to fuel price increases. Air freight, in particular, is sensitive to jet fuel costs, leading to higher shipping expenses when oil prices rise.
- Maritime Shipping: Increased bunker fuel prices result in higher freight rates from ocean carriers, raising the landed cost of goods and affecting competitiveness in the global market.
Labor Shortages in Logistics
The U.S. logistics industry faces workforce shortages that strain supply chains. The American Trucking Association (ATA) has consistently reported a deficit of tens of thousands of drivers annually. In addition to driver shortages, warehousing and other logistical roles have been impacted, with many experienced professionals retiring. These gaps lead to increased wages as companies compete for limited talent, resulting in shipping delays and higher freight charges.
Increased E-commerce Demand
The sustained growth of e-commerce has transformed consumer behavior, increasing pressure on logistics and shipping systems. Global e-commerce sales are projected to reach $6.86 trillion in 2025, surpassing pre-pandemic levels. This surge elevates parcel volume demand across ocean, air, and especially trucking for last-mile delivery.
- Infrastructure Strain: U.S. infrastructure, including ports, trucking, and air cargo, faces immense demand, leading to congestion and higher freight rates.
- Complex Last-Mile Delivery: Consumers’ expectations for rapid delivery (same-day/next-day) necessitate increased fleet sizes, advanced technology, and more staff, driving up shipping costs.
- Warehousing Expansion: To meet consumer demand, businesses invest in decentralized warehousing near population centers, increasing operating and logistics expenses.
Regulatory and Compliance Costs
Regulations that protect our environment and ensure safety are critical, but they can also add to the cost of shipping behind the scenes.
- Environmental Regulations: International maritime regulations (e.g., IMO fuel changes) and U.S. standards (e.g., California emissions) require investments in cleaner fuels and technology.
- Safety and Security Measures: Enhanced cargo and port security protocols, along with strict driver safety regulations, add operational overhead and procedural costs.
- Customs and Trade Regulations: Complex customs procedures, evolving trade regulations, and labor laws increase administrative and operational expenses for businesses.
Key Factors Influencing Shipping Costs
Package Size and Weight
Shipping companies calculate prices based on package weight or size. Dimensional weight is determined by multiplying length, width, and height, then dividing by a standard divisor. This calculation ensures large, lightweight packages are fairly priced.
Delivery Speed
Faster delivery options, such as express shipping (1-2 days), are more expensive due to expedited services and dedicated transportation resources. Standard shipping (3-7 days) is more economical, utilizing ground transport in consolidated loads.
Shipping Distance
Carriers organize shipping distances into zones. In the U.S., zones range from 1 to 8 based on origin-to-destination mileage. Longer distances incur higher costs due to increased fuel consumption, additional handling, and logistical complexities.
Deliveries to urban centers often include surcharges (up to 25% more than rural areas) due to traffic congestion, parking challenges, tolls, and higher labor costs.
Insurance and Tracking Services
Insurance and tracking provide protection and monitoring, but add to shipping costs. Carriers typically offer basic liability protection (e.g., up to $100 in the U.S.). For higher-value items, additional insurance can be purchased. Tracking services vary, with basic tracking included in standard rates and advanced tracking (real-time GPS, proactive notifications) available at extra cost.
Carrier Selection
Shipping costs, transit times, and services depend on the chosen carrier. National postal services like USPS are cost-effective for smaller, less time-sensitive packages. Private couriers like FedEx and UPS offer specialized services, detailed tracking, and faster delivery options at higher prices. Platforms like uShip provide competitive rates for large and bulky items by connecting shippers with a network of carriers, offering tailored solutions for various shipping needs.
Smart Tips to Avoid Overpaying for Shipping
- Compare Rates Across Carriers: Utilize platforms like uShip to compare multiple carriers in one place, ensuring you find the fairest price.
- Optimize Packaging: Use smaller boxes and lighter materials to reduce fees based on package size.
- Use Shipping Aggregators or Brokers: Aggregators negotiate discounts for large volumes. Partnering with one can lower per-package costs by 15-25% for small and medium businesses.
- Consider Flat Rate Shipping: USPS Flat Rate is cost-effective for heavy items under 70 lbs. For lighter items, services like Media Mail may offer better rates.
- Ship in Bulk: Combining orders into full truckloads reduces per-unit costs.
When to Re-Evaluate Your Shipping Strategy
- High Return Rates: Returns exceeding 15% for hard goods or 30% for clothing indicate inefficiencies. Consider offering local pickup or flexible pricing.
- Negative Customer Feedback: Complaints about delays or damage suggest carriers aren’t meeting expectations. Explore regional carriers for faster last-mile delivery.
- Shipping Costs Impacting Profit Margins: If shipping expenses exceed 20% of revenue, renegotiate deals or switch to third-party logistics (3PLs) on uShip for volume discounts.
FAQs
What’s causing shipping to be so expensive now?
Shipping rates have spiked due to a combination of tariffs, rising fuel costs, post-pandemic demand, and supply chain disruptions. In 2025, average container prices hit $2,233 as port congestion and equipment shortages created bottlenecks. These increased operating costs have led shipping companies to raise their rates, especially affecting small businesses that lack the scale to negotiate better deals.
How can I cut down on shipping costs as a small business?
Start by comparing rates across carriers and services for every shipment. Use flat-rate boxes for heavy items to keep pricing predictable. Partner with third-party logistics providers (3PLs) like those on uShip to access volume-based discounts and reduce per-shipment costs over time.
Does package size matter more than actual weight?
It can. Carriers often use dimensional weight (volume divided by a set divisor) to price large, lightweight packages. For example, a 10 lb box measuring 20x20x20 inches may be charged as if it weighs 57 lbs due to the space it occupies. This pricing ensures fairness across shipments and helps carriers maximize truck or container space.
What’s the cheapest way to ship packages internationally?
It depends on the package size and speed you need. For large shipments, slower methods like sea freight or Less-than-Container Load (LCL) are often cheaper. For smaller items, USPS economy services or uShip’s competitive bidding marketplace can provide low-cost, high-reliability options from vetted carriers.
Are flat-rate shipping options worth it?
Yes, but only in the right circumstances. Flat-rate boxes are ideal for dense, heavy items under 70 lbs. If your shipment is light but bulky, you may save more with pricing based on actual or dimensional weight. Always compare both before committing.
TL;DR: Why Shipping Costs So Much And How to Save
Shipping costs are rising due to global disruptions, fuel volatility, labor shortages, and growing e-commerce demands. But with the right strategies, you can cut expenses without sacrificing service.
Here’s what to remember:
- Fuel, labor, and regulation are driving costs up across all shipping modes.
- Package size, delivery speed, and distance all influence your final price.
- Dimensional weight pricing means bulky items can cost more than heavy ones.
- Flat-rate shipping works best for heavy items—compare before you commit.
- Use uShip or other aggregators to get competitive quotes from professional carriers.
- Optimize packaging and ship in bulk to lower per-unit rates.
- Watch your data: High return rates, delivery complaints, or margin pressure signal it’s time to reassess your shipping strategy.
Shipping doesn’t have to cost a fortune. Use smart tools, compare options, and rely on logistics partners like uShip to keep your deliveries—and your bottom line—on track.
