An opinion article from the FT. You can bypass the paywall with 12ft.io. Paul Krugman had a short Twitter thread about it.
Specifically, it appears the cost of short-term shipping is plunging.
On the Far East to South America East Coast route prices have fallen so dramatically that they’re now lower than they were at this point last year:
Here is an album of graphs that the FT article includes. See the main article for descriptions of the graphs.
Possible explanations:
- Chinese New Year leading to factories closing down (also Covid?)
- Shippers securing long-term contracts: “Peter Sand of Xeneta told us that longer-term contract rates on the Far East to Northern Europe route had jumped by 6 per cent over the past month to $9,800 per 40ft box.” Demand for shorter term contracts therefore following.
What are the implications for cost-push inflation going forward? Any other metrics to be watching of interest?
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