Transportation costs squeeze an online retailer

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Liz Benditt was hoping to go international with her company, The Balm Box, in 2024, but the impact of tariffs forced her to hold off on scaling it. Now, skyrocketing fuel costs are making it even harder for her to import products for, and ship out, The Balm Box’s cancer patient care packages.

Benditt said her inbound shipping costs since the Strait of Hormuz closed have doubled, and outbound shipping costs have gone up 20%–25%.

“When I think about transportation costs, I mean, we’re getting hit from both sides,” the founder, and six-time cancer survivor, told CFO Brew.

Benditt isn’t alone in feeling the squeeze; last month, transportation prices expanded faster than in nearly a decade, according to the Logistics Managers’ Index, a joint project between researchers at several US universities, supported by the Council of Supply Chain Management Professionals.

They compile the monthly index, or LMI, from eight industry components, including warehousing, transportation, and inventory.

In May, not only did transportation prices increase at the fastest rate in the LMI’s 10-year history, transportation capacity decreased and utilization remained high, as well.

The aggregate of those costs also represented “the highest reading since March of 2022,” when “a run of high logistics inflation…led to the highest US inflation in 40 years,” according to the LMI’s May release.

“If logistics costs remain elevated, it is likely there will be at least some inflation,” it continued.

The cost for quality. Benditt refuses to skimp on quality for The Balm Box to lower her inbound shipping costs. She has found the quality of blankets, socks, and other soft goods made in countries like China to be much better than those made domestically.

“We’re not going to suffer quality; we’re serving cancer patients. We feel very strongly that we’re a premium product, and we have to make sure that the products that we sell live up to that,” she explained.

To help with the added transport costs, Benditt is leveraging the strong manufacturing and distributing partnerships she’s built over the years by negotiating a cost split with them.

“Other ways that we are manipulating that is trying to do slightly larger orders, so that we can then amortize that shipping cost over more items, more units,” she said.

Distractions. The time Benditt spends addressing volatility in her business plan has kept her from more than just international expansion, she said. “We’re also looking at [an] acquisition right now,” but Benditt said it is “going very, very slowly.”

“It’s not moving because I am not pushing it. I’ll get there, but it’s really tough; there are only so many hours in a day,” she said.

Benditt hopes that continued international expansion isn’t completely off the table for The Balm Box, though. “I’ve walked away from it temporarily. I would really like to bring it back, but for the moment it’s just too volatile.”