The cost of shipping a 40-foot container from Shanghai to Los Angeles (white) and from Shanghai to Rotterdam (blue) in US dollars. Data: World Container Index, Bloomberg
Tariffs for cargo transportation from China to the US west coast have been holding in the region of record values for several months and may continue to grow further. Worse, new contracts from major US importers indicate that rising freight costs are unlikely to be a short-term phenomenon.
Usually, most of the largest retailers and manufacturers enter into contracts with carriers in the spring and thereby fix tariffs for the coming year. Thus, the current record tariffs are factored into the contracts concluded today for the next 12 months, and companies are starting to shift costs to consumers.
The deals concluded in recent weeks fix the cost of transporting a 40-foot container from Asia to North America at $ 2500- $ 3000, which is 25-50% higher than a year ago, Bloomberg writes, citing data from S&P Global Platts. But this is not the limit (see the chart above – approx. ProFinance.ru).
“This suggests that people are not expecting tariff cuts to come soon,” said George Griffith, editor of S&P Global Platts, who is responsible for collecting data on freight costs.
The rise in tariffs was driven by a combination of factors that include increased demand driven by fiscal stimulus in the United States, congestion in ports, and a shortage of ships, port workers and truck drivers. These problems are too broad to find a quick solution for them, writes Bloomberg.
Nike recently reported a 10% drop in its first-quarter revenue was driven by supply chain problems, including container shortages and port congestion.