What happens to the supply chain when shipping costs rise? Act now to prepare for the risk.

Shipping costs are rising.

The medical device supply chain is beginning to contract. For manufacturers and distributors, that means higher costs, tighter margins, and new operational risks. Preparing now to mitigate and adapt to these impacts is the best way to weather the storm. And while there are many areas of concern, one factor runs through them all: shipping costs.

Transportation and freight charges influence material costs, product pricing, and lead times. They are not just a line item expense—they are a key driver of profitability. If you aren’t proactively managing costs, you risk seeing them erode your margins, limit your flexibility, and damage your customer relationships.

So what should medical device leaders be anticipating, and how can they prepare?

Increased Production Costs and Rising Shipping Costs

As transportation expenses climb, the price of raw materials will also increase depending on sourcing regions. Even if manufacturing costs remain stable, the cost of moving goods—from suppliers to your facility, and from your facility to hospitals—will almost certainly rise.

Every leg of the supply chain carries exposure to higher shipping costs. Whether it’s inbound freight from overseas, domestic trucking, or last-mile delivery to hospitals, small increases compound quickly. Without a plan, manufacturers risk absorbing these costs or passing them along in ways that could make their products less competitive.

Actionable Tip: Review your current freight contracts. Can you renegotiate better rates based on volume? Are there alternative carriers or regional distribution hubs that could lower your transportation spend? Even modest reductions in shipping costs can generate significant savings when multiplied across thousands of shipments.

Tighter Margins: Why Shipping Costs Matter More Than Ever

The challenge is compounded by pricing constraints. Many manufacturers are locked into long-term contracts with customers, limiting their ability to pass on increased costs. Raising prices often requires lengthy negotiations and risks straining customer relationships.

That means manufacturers are squeezed from both sides: higher input and shipping costs, but limited flexibility to adjust pricing. The result is shrinking margins that can cripple growth if left unaddressed.

Actionable Tip: Treat shipping costs as a strategic lever rather than a fixed expense. By investing in better forecasting, consolidating shipments, and optimizing packaging, you can control freight spending without touching contract pricing. This helps preserve margins and strengthens your position with customers.

Supply Chain Disruptions and Shipping Costs

Rising shipping costs rarely occur in isolation—they often signal broader logistical challenges. Port congestion, driver shortages, and fuel price spikes can lead to longer lead times and delivery delays. For medical device manufacturers, the stakes are especially high. Shortages and disruptions can delay elective surgeries, frustrate providers, and damage reputations.

Actionable Tip: Build redundancy into your logistics network. Establish relationships with multiple carriers and consider alternative ports or regional warehouses. The ability to pivot quickly reduces reliance on any single shipping channel and helps mitigate cost spikes during disruption.

Actionable Strategies for Reducing Shipping Costs

Here are several steps medical device companies can take today to keep shipping costs under control:

1. Employ Demand Forecasting Tools – Accurate forecasting reduces the need for last-minute, expedited shipments that inflate shipping costs. Forecast your demand 6–12 months out and adjust safety stock levels to reduce the risk of shortages.
2. Consolidate Shipping – Align orders to reduce the frequency of small, costly shipments. By consolidating freight, you not only lower shipping costs but also improve efficiency in receiving and handling.
3. Reassess Production Pipelines – Consider pulling builds forward in anticipation of increased freight charges. Securing additional raw materials now may protect against both rising input prices and future shipping costs.
4. Right-Size Packaging – Review packaging dimensions and weight. Even small changes can reduce dimensional weight charges and lower overall freight spend.
5. Increase Visibility – Use supply chain and field management tools to track inventory location and movement. Identify stagnant inventory and redeploy it to where it’s needed most. Smarter redeployment reduces emergency shipments and keeps shipping costs in check.

Why Shipping Costs Should Be a Board-Level Priority

Periods of supply chain disruption will always create stress. But for medical device companies, ignoring the impact of shipping costs is no longer an option. These costs touch every corner of the business: procurement, production, distribution, and even sales.

By focusing on forecasting, consolidating freight, reassessing production, and improving visibility, organizations can reduce waste, protect margins, and position themselves for growth even in a constrained market.

As you plan for the next year, put shipping costs at the center of your strategy. Those who act now will not only weather the storm—they’ll emerge more resilient, more efficient, and more competitive in the medical device market.

If you’re wondering how your operation will fare, try out our free readiness assessment.

How Beacon Eases Supply Chain Pressures

Beacon helps medical device companies stay ahead of supply chain pressures by connecting purchasing, inventory, and field operations in one system. With real-time visibility into where products are, automated demand forecasting, and smarter replenishment tools, Beacon reduces costly surprises and minimizes reliance on emergency freight. By keeping PAR levels aligned with true demand and enabling redeployment of underutilized stock, Beacon helps manufacturers and distributors cut down on wasted spend, control shipping costs, and keep products moving where they’re needed most.