Persistent Cost Pressures On Medical Supply Chain

October 2022

Persistent cost pressures on ocean freight, ground transportation, and raw materials are affecting the cost of medical products. Meanwhile, the Federal Reserve predicts that overall inflation will remain higher than expected through 2024.

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Ocean Freight

Down slightly from January 2022 peak but still at historic highs 2.2 times more expensive than pre-COVID

Ground Transportation

Parcel shipping costs increased 5.9% in 2022, following a 4.9% increase in 2021.

Diesel costs at $4.99 per gallon in September 2022, up 147% year-over-year

Raw Materials

40% of manufacturers say inflationary pressures are worse today than six months ago.

95% of manufacturers cite increased raw material prices as a top source of inflation.

Above Average Inflation

The Federal Reserve expects inflation to exceed its targets through the end of 2024.

7.2% 2022 Annualized Inflation
3.2% 2023 Projected Inflation
2.5% 2024 Projected Inflation
2.0% Federal Reserve Target

Federal Reserve logo

Sources: Air Cargo News; 9/27/2022; Why parcel shipping will be even more expensive in 2022, Supply Chain Dive, 1/31/2022; Monthly retail prices for diesel fuel in the United States from September 2020 to September 2022,; National Association of Manufacturers; Manufacturers’ Outlook Survey; September 2022; Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters, August 2022

Find more resources about the healthcare supply chain on HIDA’s Understanding Healthcare Distribution page.