If inflation is officially 3.5 percent, why is shipping going up 5 percent?

Shipping up more than inflation

Shipping Costs About to Rise

We don’t know why and we can’t control UPS, but shipping costs are going to rise for sure. Consider avoiding the certain price increase by making your online purchases now.

Atlas Signs and Plaques uses the services of UPS for the vast majority of shipping needs. UPS does a great job, but have announced a 4.9% price increase for 2012. Of course they color their explanation rosy and justify the increase by saying they will “expand and improve our portfolio of solutions”, but 5% is a buck more on a $20 shipment, and most of us don’t care about their “portfolio of solutions”, whatever that means. We just want our package delivered on-time and undamaged.

So again, why do some things go up more than others?

Our government, more accurately the Bureau of Labor Statistics (BLS), attempts to compute Consumer Price Index, (CPI) (use to be called the Cost of Living in simpler times), which is suppose to give us the current rate of inflation. In other words, how much more things should cost now compared to last year. Yes we know this is high school economics.

photo of make love clock

Tic Toc, Prices are going up like clockwork so make peace with inflation

But, does it actually measure how much more it costs each of us as individuals? Probably not. The reason is that it depends on what we buy. Our federal government has to make some assumptions to come up with a number that is meaningful month to month, and year to year. They put together a market-basket of 80,000 items and track the prices. Those 80,000 items include everything from cars, to haircuts, chicken, gasoline, funerals, pets, jewelry, tobacco, furniture, to wine (I am truly sorry that my wine consumption is affecting inflation). So, if you don’t purchase 80,000 items each month and mirror the official shopping basket, your individual Cost of Living will be different from the BLS number.

For the editorial portion of this post: Purely subjectively, it seems that the reported inflation is understated. Some of the big things like mortgage interest have decreased, but many everyday items seem to be going up rapidly.

The cost of shipping is not the only thing going up. Most everything purchased by Atlas Signs and Plaques is increasing in price at a rate much greater than the CPI  (must not be part of the 80,000 item BLS shopping basket). Atlas shops smart, but can you guess which way prices are heading?

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