Transportation rates continue to drive inflation

From America’s high seas and rail yards to the nation’s highways and airports, inflationary pressures for shipping costs continue to mount.

The latest government data on producer prices showed that the costs of transporting and storing goods for final demand soared more than 18% in November compared to the previous year. That’s the biggest annual advance in data since 2009.

Higher freight costs are fueling rampant inflation, which is consuming more of consumers’ income and driving up costs for businesses. A surge in demand seen earlier this year triggered instability in supply networks as producers and operators scrambled for products.

In the detailed report of the Department of Labor on producer prices published last week, it can be seen that the cost of transporting cargo across the oceans in November was almost 26% higher than a year ago, the largest annual increase. in data since 1988.

Truck freight costs rose more than 16%, the second largest increase on record, while air and rail shipments have also seen large increases.

The rates charged by transatlantic carriers also continue to rise. After the cost of shipping a 40-foot container remained below $ 8,000 since late August, the Drewry Hong Kong-Los Angeles rate increased 7.2% in the last week to $ 8,510.

That represents a 120% increase over the same period last year. The TAC index for air travel from Asia to North America also hit a record last week.

“Supply chain constraints have driven rates to levels we consider unsustainable and created increased volatility”, dice Lee Klaskow, Senior Industry Analyst at Bloomberg Intelligence.

“The omicron variant has created more headaches for the freight industry, ports and carriers following recent closures in China’s Zhejiang province. More outbreaks will add more stress to supply chains. “added.