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24 November, 2021 Industry News

Consumer Prices to Rise Due to Shipping Crisis, According to UNCTAD

Consumer Prices to Rise Due to Shipping Crisis, According to UNCTAD

Read about what's happening in the shipping industry!

A recent report from the United Nations Conference on Trade and Development (UNCTAD) states that it is likely the global economic recovery will be severely hindered by the shipping crisis and high freight rates. The report’s analysis shows that if the current elevated pricing in the shipping industry continues, this could result in an increase of global import price levels by 11% and in turn, raise consumer prices by 1.5% between now and 2023.
UNCTAD Secretary-General, Rebeca Grynspan stated, “The current surge in freight rates will have a profound impact on trade and undermine the socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal.” She continued with, “returning to normal would entail investing in new solutions, including infrastructure, freight technology and digitalization, and trade facilitation measures.” Importantly, the report highlights that not all countries will be affected equally, but that countries relying heavily on imports, and those least developed will most likely bear the brunt of the price increases.
Drewry’s World Container Index showed that over the past week, spot rates dropped 0.5%, a marginal decrease. Across some of the major routes, Shanghai to Rotterdam saw the largest decrease in spot rates, at 3%. Los Angeles to Shanghai also decreased 2%. On the other hand, Shanghai to Los Angeles rose 1%, while Shanghai to New York increased 3%. The other major routes in the index remained unchanged from the previous week. The index is still 238% higher than it was one year ago.
According to an article from Bloomberg, port congestion in Asia seems to be slightly easing, while ports in the US continue to struggle with large volumes of imports, leading to congestion and delays. Shanghai-Ningbo declined 0.2% compared to last week, while Hong Kong-Shenzhen’s ship count was 10.4% lower, according to Bloomberg. Singapore also experienced an easing of congestion over the past week. However, the easing of congestion is not uniform across Asia, as the ports of Tianjin and Manila are experiencing an increased backlog. For the other side of the Pacific, the Ports of Los Angeles and Long Beach have seen a 6.7% increase in congestion over the past week.
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