Supply chain expert warns of rising rates going into peak season: ‘I see a lot of trouble ahead’

Alba Wheels Up President Salvatore Stile discussed ongoing supply chain issues and predicted rising rates going into peak season, Friday, warning on "Mornings with Maria" that he sees "a lot of trouble ahead."

SALVATORE STILE: In my personal opinion, and I hope I'm wrong, I only see the rates getting higher during the supply chain, during the summer months to continue. You have to remember the rates that are dictated are by the carriers. I'm not sure many people are aware, but the Trans-Pacific trade is well controlled basically by foreign carriers. So they're setting the rates they are setting who's getting containers and who's not getting containers.

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I'm generally concerned about the mid-market companies who have cut their capacities from the steamship lines who are going to have to pay rates above the contract rates that the large corporations are getting. And they're going to really be in a squeeze play because they're going to have to scramble to get their freight, and they're going to try to appease their retailers.

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Last year, many of the corporations actually absorbed the freight costs and did not pass 100 percent of it on to the retailers and to their client base. They can't do that again this year. So now not only do we have a lag from last year for the increase of rates that should have been passed on. We have the rates this year which only get higher, especially during the peak season. So I see a lot of trouble ahead, quite frankly.

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