Key Points
- Far East to U.S. ocean freight rates are up between 36%-41% month over month, while air freight prices have jumped 9% this year.
- DHL says ocean freight rate inflation might not ease up before Chinese New Year in early 2025, with some forecasts seeing rates reaching to between $20,000 and a Covid era peak of $30,000.
- Longer Red Sea transits resulting in a shipping container capacity shortage and canceled sailings from Asia are stoking spot ocean freight rates.
- Demand alone cannot explain the price hikes, with ocean freight orders down 48% month over month.
Just as the Federal Reserve and U.S. economy get good news on inflation, with consumer prices and wholesale prices softening, a major global trade inflation indicator is headed in the wrong direction. Rising freight rates are a new source of concern in the global supply chain with forecasts warning that ocean cargo prices could reach $20,000 — potentially even touch the Covid era peak of $30,000 — and stay there into 2025.
Spot ocean freight rates from the Far East to the U.S. popped between 36%-41% month over month, and ocean carriers increased additional charges known as general rate increases by roughly 140%, according to the CNBC Supply Chain Heat Map. These costs have taken the price of a 40-foot cargo container to about $12,000.
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