Shipping costs have risen by 257% this year, driven by a surge in demand for discounted Chinese products. The spot rate for shipping a 40-foot container on the Shanghai to Los Angeles route is around $7,300, up from $1,965 a year ago. However, these costs are still below peak levels in 2021, when supply-chain disruptions impacted the flow of goods.
The increase is partly due to a “boost” in demand for Chinese products, partly driven by excess production in China’s manufacturing sector and subsequent discounts. Additionally, fewer ships are travelling through the Red Sea due to Houthi rebel attacks, resulting in longer routes that tie up resources.
Retailers may be ordering Christmas and holiday goods early to avoid disappointments. While shipping costs have affected global inflation to a small degree, the net boost to consumer prices will be offset by cheaper imports.
Source: Globe and Mail
