Room For Innovation As Shipping Costs Soar
There's a lot that goes into shipping a box of Harbour House crabs.
And these days, a lot more money goes into it too, as owner Curt Engle learned when his Federal Express rates shot up $35 a bushel, CBS News transportation and consumer safety correspondent Nancy Cordes reports.
"The first thing I'm doing is I'm calling my FedEx rep and saying what's going on?" he said.
Since April, FedEx has raised its fuel surcharge from 18.5 percent to today's 34.5 percent. That's as it copes with a 54 percent hike in the cost of fueling its own trucks and jets.
UPS has seen the same rate hikes. Now it's trying out new GPS devices that allow cargo planes to make more direct landings.
But that saves just $200 a flight. For the shipping and trucking industries, which run on fuel, there are few ways around high oil prices.
"A container coming from China to L.A., the price of that container has gone up by close to 50 percent in the last five years," said Hamid Moghadam, CEO of real-estate developing corporation AMB Property.
Diesel prices have driven an estimated 45,000 big rigs out of the business just since last year. Trucking companies that used to cap speeds at 68 mph are slowing down to 60 to save on fuel.
Wal-Mart wants to give the nation's first hybrid big rigs a go.
"From a driver's viewpoint, there's really no difference," said Bill Jackson, the general manager of Peterbilt. "They push on the throttle, it goes; they step on the brake, it actually powers it back and charges the batteries."
Today's higher shipping costs mean higher prices - for everything. Engle has had to raise his - and says sales volume is down about 20 percent.
"Is it tough for you to decide how much of that increased cost you're going to pass along to the customer?" Cordes asked.
"Well we obviously have to pass along some of that cost. Because we can't eat that cost," he said.
Thousands of businesses just like his are feeling the same pinch.
