Global shipping rates rise

The war in Ukraine, the technology hub of China closed down, and record demand -- there's no shortage of inflationary pressures, something that has driven global shipping rates to multi-year highs. After September's peak, it seemed like perhaps the worst was behind us. 

However, warnings of a Russian invasion into Ukraine and ultimately, the war itself has created a surge in commodity demand on concerns of getting supply as quickly as possible before bans and sanctions are placed. That practice has pushed those rates higher. The full effect of those geopolitical tensions, however, tends to show up into shipping rates at a lag of at least six weeks. We're only on day 19.

 

Now, add on the closed Chinese tech hub of Shenzhen due to a rise in Covid cases. That's going to add even more supply chain pressures, which in theory would be another tailwind for shipping rates. For some macro-watchers, however, the concern is that rates aren't rising fast enough in the face of these hurdles, perhaps an early signal of slowing demand.