From today’s research note (on NZ commodity export prices) this:
- Global shipping costs are not showing any signs of abating. Shipping delays have been exacerbated by issues at the Yantian port in southern China, which was compromised by a COVID-19 outbreak. While that port is now back operating at full capacity it will take months to clear the backlog.
- Costs to move goods on both container ships and bulk carriers have skyrocketed. The Baltic Dry Index gained 30% in June to hit a new record high. The congestion in the shipping industry is not expected to abate until well into next year.
As PMI reports pour in from around the place (early in the month sees a flurry of PMI releases) we are getting commentary time and again on input costs rising, and congestion in shipping is playing a big role. Not to dismiss other factors such as tight labour.
The Fed, and other central banks, are watching developments trying to ascertain whether the inflation we are seeing is transitory. Not everyone thinks it is: