The price of shipping has reached an 18-month high – threatening to impact the fall in the inflation rate.
It is now more expensive to transport a typical container on a major shipping route than it was when Houthi militants began attacking boats in the Red Sea late last year to prevent ships from docking and exporting from Israel.
An index that measures the average cost of a 20-foot container transported from Shanghai to Europe – and is the most widely used freight cost measure – reached $3,949 (£3,102).
The Shanghai Containerized Freight Index (SCFI) has risen sharply over the past month, according to data provided to Sky News by global logistics company DSV.
Since the first days of September 2022, when global supply chains were recovering from the blockage of the Suez Canal, the cost has never been higher, at $4,252 (£3,341) per container.
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The blockage of Suez by the Ever Given container ship, which ran aground in 2021, ushered in a sharp rise in shipping costs as goods could not move freely along the vital maritime artery, causing chaos at ports and clogging the supply lines.
Boats that had to make alternative journeys and were diverted also increased transportation costs.
Ship sunk by Houthi causes damage to Red Sea
Why does this matter
It was this wave of supply chain problems that caused part of the first shock to the economy that caused inflation, the rate of price increases, to rise.
The economy has largely recovered from the shocks – including energy price increases that triggered Russia’s invasion of Ukraine – that resulted in the inflation reaching 41-year high of 11.1% in October 2022.
Although inflation has fallen significantly – to 2.3% at last reading – Expensive shipping may increase the rate.
Most products on UK shelves spend at least part of their life at sea, so the fact that importers have to spend more to get products to the UK could mean consumers pay more at the tills.
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Why is this happening – and may prices remain high
Last week, the world’s second-largest shipping container company, Maersk, said it expects to make even higher profits than previously thought due to demand and disruption.
The “ongoing crisis” of the Red Sea and “cascading effects on global supply chains” are part of the market, he said.
Businesses will continue to benefit, he added.
Maersk said: “Continued threats to commercial ships in the Red Sea and growing bottlenecks in the supply chain indicate that this situation will not improve soon. More capacity than expected will be needed to resolve these issues and stabilize the global supply chain .”
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