![]() ![]() If the price I paid for a gallon of gas, for example, increased eight-fold that would be almost unimaginable. Hasenstab: Wow, and when you talk about global shipping costs increasing by eight times or twelve times, that’s huge. But the vast majority of goods that are shipped internationally is by sea. So, note there’s other ways of shipping goods internationally, such as by plane when the type of goods shipped allows it or by truck if you’re dealing with countries that are connected by land. This cost actually peaked at around $20,000 in September of 2021. West Coast, costs have increased more than 12 times, from around $1300 in February of 2020 to close to $16,000 in the latest readings. ![]() Now, bringing it closer to home, if we look at the cost of shipping a container from China, say, to the U.S. Remaining quite high to this day at about $9500. So, compared to February of 2020, this index increased by eight times, from about $1300 per container to a peak of around $11,000 in September of 2021. It’s a measure of global shipping costs across major routes in the world. So, to give you a sense of how much these container shipping costs have increased, consider the FBX Global Container Freight Index. So, containers come in different sizes but one of the most popular sizes is the 40-foot container, in units in which shipping costs are typically quoted, okay? So, the great advantage of shipping stuff in this way is that both ships and ports are designed to efficiently handle containers, making it easy to load and offload them, easing international transactions. So, goods are placed inside containers making it easier to ship goods of different types, shapes and sizes all in a standardized container. So, there’s tons of those sitting atop huge ships or waiting at the port. So, what are these containers? Containers are those big, colorful, rectangular boxes that you must have run across in the economics related media over the past year. ![]() So, the way in which most goods are shipped internationally in this day in age is through big ships that are filled with containers. But now, before we dig deeper into these recent developments, let me step back and try to discuss some basics about international shipping costs. Leibovici: Yeah, so we’re living a world in which international shipping costs are now much higher than they used to be prior to COVID-19. Where are we now? How did we get here and where do we go moving forward?Ĭan you recap the current situation? What’s going on and how does it affect businesses and how does it affect consumers? Hasenstab: Today we’re going to talk about international shipping cost. Louis, thanks for joining me.įernando Leibovici: Thanks, great to be here. In this episode we’ll be discussing international shipping cost and supply disruptions with Fernando Leibovici, senior economist at the Federal Reserve Bank of St. Louis Fed’s Timely Topics podcast series where we interview economists about their research. So, it’s no surprise that we’ve been facing not just higher prices but also increased delays. We’re experiencing relative scarcity of shipping capacity. ![]()
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