Deep sea freight transportation

costs trends & supply chain tensions

are global shipping costs causing inflation?

On Sea freight transportation costs:

• the cost index has reached 430.2 points, growing at 1.3% YoY
• those costs are currently high, in the top range of 10-year observations
• the trend has been volatile, going up (by 18.8 points) in the quarter and down (by -0.5 points) last month

Implications:

elevated and volatile transportation costs continue to suggest sustained inflation pressures.

IntroDeep sea freight transportation costs measure shipping costs around the globe to transport goods across major maritine routes. Issues such as rerouted vessels, port congestion and higher operational costs can increase supply chain tensions and ultimately transfer rising prices to the final consumers.

Economic implicationsA sharp rise in freight rates can have profound ripple effects on global trade and economic stability. It has been estimated that a 1 standard-deviation increase in global shipping costs can increase domestic headline inflation by about 0.15%.

Chart guideThis chart helps us monitor the change in global shipping costs - a relevant inflation drivers - to anticipate any possible emerging inflation pressure (or disinflation trend).

Air freight transportation

costs trends & supply chain tensions

are air freight transportation costs causing inflation?

On Air freight transportation costs:

• the cost index has reached 183.1 points, growing at -2.4% YoY
• those costs are currently high, in the top range of 10-year observations
• the trend has been volatile, going up (by 4.2 points) in the quarter and down (by -8.0 points) last month

Implications:

elevated air transportation costs suggest high demand for urgent shipments due to ongoing supply chain tensions and delays: the result is sustained inflation that - given recent volatility - is likely to continue.

IntroAir freight transportation costs measure shipping costs for urgent goods sent by plane around the globe. Issues such as changes in airport fees, capacity management, fuel prices or plane shortages can affect costs, increasing supply chain tensions and ultimately transfer rising prices to final consumers.

Economic implicationsA sharp rise in freight rates for more urgent goods (vs deep sea routes) can have profound ripple effects on global trade and economic stability. It has been estimated that a 1 standard-deviation increase in global shipping costs can increase domestic headline inflation by about 0.15%.

Chart guideThis chart helps us monitor the change in global air freight costs - a relevant inflation drivers - to anticipate any possible emerging inflation pressure (or disinflation trend).