Inflation in the United States is far from peaking, and the CPI exceeded expectations in May, setting a new 40-year high again. In order to combat high inflation, the US shipping sector will implement the largest reform since 1998, and the situation of "high freight rates and hard to find a box" may be reversed. Ocean freight from China to the USA has reduced gradually since June.
According to media reports, U.S. lawmakers are preparing to tighten regulations on international shipping companies, with the White House and U.S. importers and exporters arguing that high freight costs are hindering business development, driving up costs, and further fueling inflation.
On June 10, the U.S. Bureau of Labor Statistics released data showing that the U.S. CPI rose 8.6% year-on-year, a new high since December 1981, and was higher than the previous month and the expected 8.3% increase; the CPI rose 1% month-on-month, significantly higher than expected 0.7% and 0.3% last month.
At the height of the pandemic, high freight rates and capacity strains in the transportation industry afflicted U.S. retailers, manufacturers, and farmers. At the time, demand for space on container ships skyrocketed, and European and Asian shipping companies made billions of dollars in profits.
U.S. agricultural exporters say they missed billions of dollars in revenue last year by refusing to ship their cargo in favor of shipping empty containers back to Asia on more lucrative eastbound trade routes. Importers said they were being charged hefty fines for failing to retrieve containers during periods of congestion refusing to handle containers.
According to FMC data, the average freight rate in the global container market has risen eightfold during the epidemic, reaching a peak of $11,109 in 2021. A recent agency survey showed that the maritime industry is competitive, with rapid price increases driven by "a surge in U.S. consumer demand resulting in insufficient vessel capacity."
During the pandemic, many Americans have cut spending on restaurants and travel in favor of durable goods such as home office equipment, electronics, and furniture. U.S. imports are up 20% in 2021 compared to 2019.
Freight rates have fallen sharply in recent months amid weak U.S. consumer spending. According to the Freightos-Baltic index, the average spot rate for containers on congested routes from Asia to the U.S. West Coast has fallen 41% to $9,588 over the past three months.
The number of container ships waiting to unload has also decreased at the busiest container handling hubs in the U.S., including the ports of Los Angeles and Long Beach. The number of ships lined up on Thursday was 20, down from a record 109 in January and the lowest since July 19 last year, according to data from the Southern California Marine Exchange.
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