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Distribution: Evaluate purchasing options 

Distribution: Evaluate purchasing options 

ST masonQ. Why are manufacturers implementing freight surcharges?  

A. COVID-19 continues to negatively impact the HME industry. The latest culprit – freight surcharges being accessed at the line-item level by manufacturers.  

If you haven’t noticed them on your invoices yet, get ready – they are coming down the pipeline this month. Let’s dive into the data on what is driving this development and how your business can navigate these new waters. From 2020 to 2021, manufacturers have experienced a 400% increase in the average price worldwide to import a 40-foot container. Longer wait times and inconsistent deliveries are running rampant for ocean freight with 33 days now being needed to ship products from Shanghai to Los Angeles (a 235% increase versus normal times), and 13 times more ships arriving seven-plus days late to the West Coast ports.  

When you couple these international factors with domestic pain points such as trucklines being short 60,000 drivers to meet current route demands and 1,000 to 3,000 containers being backlogged at the global rail terminal in Illinois – it results in higher costs and longer wait times for everyone. 

Health care distributors are taking action to address these challenges and build a more robust and resilient supply chain by diversifying sources and recommending alternative products to providers. By partnering with a distributor versus ordering directly from a handful of manufacturers, you gain access to hundreds of lines with one relationship. This allows you to seek out the most cost-effective products by category and make purchasing decisions in real-time based on factors such as availability, speed of delivery and current all-in price that includes any applicable surcharges.  

With costs on the rise this month, now is the ideal time to evaluate purchasing adjustments to remain profitable and ensure product availability for the communities you serve. 

Colton Mason is senior vice president at Supreme Medical Fulfillment. Reach him at [email protected] or 800-461-1370.

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