August 18, 2021 - Published by IAG Wealth Partners

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Free shipping

Shipping is free, but you pay for it.

I know online retailers go to great lengths to lure you into thinking that shipping is always free. However, shipping is always baked into the prices you pay.

Someone has to pay for the delivery driver that transports your item from the warehouse to your front door. And someone has to pay for the truck driver that delivered your item to the warehouse. And someone has to pay for the railroad to deliver your item to the warehouse where the truck driver picked it up. And someone has to pay for the ocean liner that brought your item to the port before it is loaded on the train. And someone has to pay the truck driver that took your item from the manufacturing plant to the port.

That someone is you, and you should be paying more.

According to the Freightos Baltic Index (FBX), you should be paying significantly more for shipping. One year ago, the FBX cost for shipping a 40-foot container on an ocean liner stood at $1,848. Today the FBX stands at $9,568 – an increase of over 500% in the last 12 months. Over the last three months the FBX has increased almost 40%.

As much as we have seen inflation rise in the last 12 months, it is likely that not all of the increased costs incurred by companies have been passed along to consumers yet.

Some of the screaming headline cost pressures may be transitory. For example, lumber prices have plunged 72% since their May 10 high without a mention by the talking heads. However, it is the nonheadline boring background costs like shipping and employee compensation that could be more persistent.

We humbly acknowledge that we cannot predict the future with any degree of certainty. Yet we thoughtfully started adding inflation-related investment strategies into our clients’ portfolios fifteen months ago when we believed inflation expectations were potentially too low.

In the coming months you will likely hear more about inflation. Know that it is one of the variables that we consistently take into account in our investment process (even when it “disappeared” for a decade or so), and that we will consistently focus on your long-term goals and your personal investment risk budget through whatever economic and market forces develop in the coming months.


Quote of the week: William E. Simon: “I continue to believe that the American people have a love-hate relationship with inflation. They hate inflation but love everything that causes it.”


More detailed information on the Freightos Baltic Index is available here.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

Photo by Andy Li on Unsplash

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