Higher diesel and jet fuel costs strain shipping and retail planning

Higher diesel and jet fuel prices are raising transportation costs for businesses, adding pressure to supply chains already facing energy and capacity shortages, said Zac Rogers, a supply chain management professor at Colorado State University. He said diesel prices were up 56% from the start of the Iran war as of Sept. 7. The International Air Transport Association reported that jet fuel’s weekly average price was up 106% from a year earlier for the week ending Sept. 25.

Retailers preparing for holiday demand must weigh the higher cost of air freight against slower ocean shipping. Rick Anguilla, co-founder of footwear and apparel brand Avoli, said tracking customer requests for sold-out sizes helps the company estimate demand and ship products by sea, which he said is generally cheaper than air freight. Earlier inventory shipments also helped retailers prepare for tariff changes and supply chain uncertainty, according to a retail trade group official in August.

Read the full story at cfobrew.com.