Freight rates are rising rapidly again, and no news (from Gaza) equals bad news for those hoping for lower goods-inflation. Rates on benchmark routes are up 15-20% this week taking the monthly change above 50%, meaning that we are on a path towards doubling freight rates every other month.

The routes from Shanghai to Europe and the US are both impacted despite the main trigger of the rising freight rates being the combination of a lack of shipping passage through the Suez paired with rising shipping volumes.

The imported volumes from China were record-like in April. Despite added tariffs and rising tensions, the trade ties remain decently strong, especially if you include the goods that are re-routed via Lat-Am to circumvent tariffs and/or sanctions.

Could we be heading for 2022 like freight rates due to the cocktail of a weak supply side and a strong demand side?

Chart 1a: Materially rising freight rates

Chart 1b: Goods imported from China through the year