The Rising Cost Of Containers, Listed Companies Also Tormented!

In the context of the supply chain crisis, theContainer delivery costs was too difficult for companies that are extremely sensitive to transport costs.

Crazy Container Transportation Cost

In the past year, the cost of transporting containers to ensure regular supply chain services has risen nearly sixfold.

In an interview with media outlet Mad Money, Jeremy Andrus, CEO of barbecue supplies manufacturer Traeger, said, “A year ago, it cost about $1,500 to ship a 40-foot container from Asia to the United States. Today, that spend is over $30,000 and we must be averaging close to $10,000 in shipping costs.”

According to CNBC, Andrus cited rising transport costs as the main reason for the company’s falling margins.

He added: “Our stock is big and heavy. It takes up a lot of container space, so we are particularly sensitive to shipping costs.”

Huge Losses From Rising Container Transport Costs

The company’s quarterly report showed that Traeger’s sales increased by 11.7% year-on-year in the third quarter, however, gross margins were only 33.5%, well below the 45.3% recorded in the same period last year.

Its share price has also been affected. On Monday, Traeger’s share price fell to $14 per share, its lowest ever, down about 28 % in the last five trading days. Its share price peaked at $32.59 per share.

Andrus says he believes the issue of container transport costs will eventually be resolved.

Andrus says: “We are sensitive to the recent shifts. In terms of these costs, the world will make optimisations and we will see a significant increase in earnings.”

Traeger was founded in Delaware on August 4, 2017, to design and sell wood chip grills. The company went public in late July of this year.

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