Shipping Container Rates Reach $10,000 With Further Rises Feared Soon

(NewsReady.com) – Inflation has crippled people across the world. While it has decreased, the cost of goods appears to be higher than ever. Shipping container rates have skyrocketed, which could increase that burden.

The cost to ship auto parts, toys, and other goods to New York from Shanghai rose to $9,387 on July 11, according to the Drewry World Container Index’s spot rate. That’s more than double the rate from February.

Experts believe the increase is the result of Yemen’s Houthi rebels. The militants have repeatedly attacked ships that have to travel through the Red Sea. As a result, shipping companies are being forced to take longer routes to avoid the Suez Canal, including sailing around Africa. That has led to an increase in time and other costs, like fuel. On Monday, July 15, the rebels attacked two tankers in the Red Sea with missiles and drones.

The attacks have caused major problems for the industry. Shortages of goods are becoming an issue, and the disruptions are also driving up costs. In America, retailers are ordering goods sooner, and the rates are higher because it’s already peak season because of children going back to school, Halloween, and Christmas.

Experts are concerned there might be another inflation wave because of the shipping problems. Lalo CEO Greg Davidson, whose company sells infant high chairs, said there hasn’t been any “transparency” about what is driving the inflation, and the retail industry is bracing for prices to shoot up to $20,000 per container.

There are also concerns that former President Donald Trump might bring back his tariffs if he wins a second term. The Republican candidate has promised that he will bring manufacturing back home.

Simon Heaney, a senior manager at Drewry, said there’s now “a bubble” that “will eventually pop.” Andy Chu, a research analyst for Deutsche Bank, said it’s hard “to understand the magnitude and pace of the rate rises.”

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