According to the Kobeissi Letter, container shipping costs from China have spiked to their highest levels since 2022.

Since the beginning of 2024, shipping rates have more than TRIPLED.

It now costs approximately $9,000 to ship a 40-foot container from Shanghai to New York and around $8,000 to Los Angeles.

This increase has been driven by a sharp drop in Suez Canal transit volume, disruptions at some ports in Asia, and a rise in demand due to inventory restocking.

Rising shipping costs are fueling inflation.

So, what does this mean? The tripling of shipping rates since the beginning of 2024 indicates that the cost of transporting goods has increased dramatically. This surge in costs is often passed down the supply chain, ultimately leading to higher prices for consumers. As businesses face increased expenses for importing goods, they may raise prices on a wide range of products, from electronics to clothing and household items, contributing to inflationary pressures.

Small and medium-sized businesses, which may have less flexibility in absorbing increased shipping costs, are particularly vulnerable. These businesses might face tighter profit margins or even be forced to pass on higher costs to consumers, which can reduce demand for their products. Additionally, companies that rely heavily on just-in-time inventory systems might struggle to manage stock levels, potentially leading to lost sales or the need to hold more inventory, which ties up capital. 

See the item here: https://x.com/KobeissiLetter/status/1822285090417738080