Take Maritime Shipping Off the Inflation Warning List
A January price spike is easing because of ample capacity and efficient ports.
Drought created a logjam at the Panama Canal.
Photographer: Walter Hurtado/Bloomberg
Inflation hawks can breathe a bit easier over their concern that maritime shipping rates would force up the price of consumer goods around the globe. Rates are already trending down from a spike in January. The fear was understandable after the costs to send goods by large cargo ship exploded during the pandemic’s epic supply-chain meltdown, helping fuel the inflation bubble beginning in 2021, and global choke points flared up later.
Earlier this year, Houthi rebels shut down the Red Sea shipping lane. The Iranian-back group based in Yemen has been firing on commercial ships, sinking the Belize-flagged Rubymar in February and killing three crew members aboard the True Confidence, a bulk commodity carrier that was sailing through the Gulf of Aden in March. The gulf is the entrance to the Red Sea, which ships loaded with Asian goods bound for Europe must traverse to reach the Suez Canal and cross into the Mediterranean Sea. Ships have been rerouting around this dangerous sea passage, and in the first three weeks of March the number of vessels passing through the Suez Canal dropped by 51%, according to the Baltic and International Marine Council, the largest maritime shipping association, known as Bimco.1