The daily cost of transporting crude from the Middle East to Asia aboard a Very Large Crude Carrier, or VLCC, reportedly exceeded $1.2 million.

In January, that figure was around $30,000.

Think about that for a moment.

We are not talking about a modest increase in operating expenses. We are talking about a completely different economic reality.

Freight costs that previously represented around 3% of the delivered price of oil are now estimated to account for approximately 27%.

In logistics, we often talk about the importance of the total delivered cost. It is a concept that sounds rather dull until transport becomes more expensive than anyone ever imagined.