Hakko Maintains Price Point Amid Inflation Increase

Inflation: a general increase in prices and fall in purchasing value of money. It’s no secret that prices for consumer goods have risen, and not just slightly. July showed that consumer goods prices have jumped 5.4% from last year, being the largest increase since August of 2008.

A few contributing factors to the increase deals with a massive chip shortage and the continuing rise of shipping costs. Currently ongoing is a global chip shortage that was caused by both the worldwide pandemic as well as poor planning.

Manufacturing industries have been hit especially hard by this shortage, with large companies such as Volvo Cars in Sweden completely halting production*. Due to the high demand and short supply, companies are having to pay triple to quadruple prices to get necessary supplies. And then once purchased, the cost of shipping is yet another obstacle to overcome.

Beginning around the Fall of 2020, shipping costs have risen sharply due to a surge in prices for freight rates along major trade routes. Prices for several trade lanes have tripled compared to last year, and charter prices for container vessels have seen a similar rise.

These are problems that have been building since the start of the pandemic due to worldwide country lockdowns, with shipping companies cutting capacity on major trading routes, and higher priced tariffs. Unfortunately, these increased shipping expenses force businesses to pass the extra cost onto the consumer.