Transportation costs are a major player. I posted this elsewhere, but here goes....
I run a trucking operation. In a nutshell, if you want me to haul a load for you, at the same price or lower than i did it for just 6 months ago, I will not show up at your dock. You want the service, you have to ante up. Fuel and oil prices have very little if anything to do with how much you are going to pay to move product.
In this last economic downturn, the trucking sector lost a considerable amount of capacity. In one quarter alone, 80,000 trucks got taken out of the pool in the U.S. And government regulatory nonsense really made matters worse, and sped up the process of capacity downturn. And the existing pool of qualified drivers is lowest it has been in several years. Now the economy starts to get moving, more freight needs moved, there are fewer trucks and drivers to do it, and you have a situation where trucks are going to be allocated to the best customers who are paying the best rates.
And you can't just add on more trucks. Well you could, but they are going to sit. There just isn't a pool of qualified drivers to put in them. Government regulations have caused extreme tightening of the driver pool in both the regulatory requirements and the lack of desire of drivers to put up with the government nonsense and therefore bail out of the field. So, the ones who do stay and are qualified, the companies are having to fight each other over who gets them. Pay and benefits have to increase to attract the drivers. Again, you just can't add people. Government regulatory requirements, the desire of folks to put up with it, and the hassle by insurance companies and lawyers makes it extremely difficult to even attract people to do the job, let alone even get them in the seat. Many folks would throw a fit over the regulatory anal exam drivers have to go thru, with the constant hovering of government threatening your livelihood any given day. And taxation costs are such that a typical over the road truck pays more in just taxes and fees across the board alone than the average person in America earns in income.
Equipment costs are drastically more higher, due to the massive environmental regulations on heavy diesel engines in the last 8 years. It has magnified the cost in both acquisition and operation, and plays havoc on the net weight a truck can haul. Maintenance and downtime has increased significantly. So even less available capacity on a given day.
A lot of stuff moves by rail, but a truck has to get it from the rail yard to where ever it is needed. You can't just pull up a CSX box car to the back of a Walmart. Rail is already nearing capacity itself. There just isn't an unlimited amount of rail cars to throw stuff on. Again, the highest bidder and best customer gets the space on the train. Air freight, over 80% of air freight actually moves, hub to hub, by truck, and not on a plane.
Virtually all of this has been government inspired. Of almost every negative situation in transportation now can be laid at the doorstep of a government agency. But, keep in mind, your government cares for you! Keep that in mind as you break out your wallet and pay for your goods and services.
