## Global Shipping Costs Are Moderating, But Pressures Remain

_IMF Blog, January 13, 2022_

## Source details

**Canonical URL:** [Global Shipping Costs Are Moderating, But Pressures Remain](https://www.imf.org/en/blogs/articles/2022/01/13/global-shipping-costs-are-moderating-but-pressures-remain)

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## Bibliographic details
- Authors: Parisa Kamali
- Published: January 13, 2022

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### Recent trends and key statistics
- Container rates have "more than quadrupled since the start of the pandemic," with some of the biggest gains concentrated "in the first three quarters of last year."
- Global container rates began to pull back from their record in September and have since declined by 16 percent, "mostly due to falling rates for trans-Pacific eastbound routes, the main sea link from China to the United States."
- The traditional peak shipping season is "typically from August to October."
- Publication date and author: Parisa Kamali, January 13, 2022.

### Drivers of recent changes
- Demand-side: Consumers "unleashed pent-up savings to buy new merchandise" while the pandemic continued to snarl supply chains.
- Supply-side constraints and disruptions:
  - Lockdowns, labor shortages, and strains on logistics networks led to shipping-cost increases and significantly lengthened delivery times, though those pressures are easing.
  - Backlogs and port delays.
  - Labor shortages in related occupations.
  - Supply chain disruptions moving inland.
  - Shipping-industry challenges such as slow capacity growth and consolidation that concentrated the market power of a few carriers.
- Policy action: "The US recently ordered some ports to expand operating hours and boost efficiency to reduce congestion and ease supply bottlenecks."

### Outlook and distributional impacts
- Although rates have subsided, they "may remain elevated through the end of the year."
- If the pandemic is controlled in the future, demand for tradable goods "might gradually decline as some service-providing sectors, such as travel and hospitality, recover."
- Price pass-through and sectoral effects:
  - "Higher shipping costs and goods shortages are expected to boost merchandise prices."
  - UNCTAD projects that "if freight rates remain elevated through 2023, global import price levels and consumer price levels could rise by 10.6% and 1.5%, respectively."
  - Impact would be "disproportionately larger for small, developing islands which heavily rely on imports that arrive by sea."
  - "Higher freight rates will also result in larger increases in the final price of low-value-added products." Smaller developing economies that export many of these goods "could become less competitive and face difficulties with their economic recoveries."
  - Final prices of products highly integrated into global value chains, such as "electronics and computers," will also be more affected by higher freight rates.

### Policy implications and recommended responses
- Returning to pre-pandemic shipping rates will require:
  - Greater investment in infrastructure.
  - Digitalization in the freight industry.
  - Implementation of trade facilitation measures.

*Source: IMF Blog — "Global Shipping Costs Are Moderating, But Pressures Remain" (Parisa Kamali, January 13, 2022).*

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## References

- [significantly lengthened delivery times](https://blogs.imf.org/2021/10/25/longer-delivery-times-reflect-supply-chain-disruptions)
- [https://www.imf.org/wp-content/uploads/2022/01/COTW-Shipping-Costs.jpg](https://www.imf.org/wp-content/uploads/2022/01/COTW-Shipping-Costs.jpg)

_Source: https://www.imf.org/en/blogs/articles/2022/01/13/global-shipping-costs-are-moderating-but-pressures-remain_