Inflation overboard
A spike in shipping costs won’t cause inflation to surge again. Here’s why
Economics | Not your pandemic shipping woes
Pirates aren’t just in movies. They’re alive on the high seas. Earlier this month, Houthi rebels from Yemen attacked multiple commercial ships in the strait of Bab al-Mandab between the Indian Ocean and the Suez Canal. These ships were supposedly bound for Israel, which the Houthis wanted to prevent. Still, these attacks disrupted global trade. A few shipping companies have decided to avoid the Red Sea and have instead opted to take the longer route around the southern tip of Africa.
These decisions have increased shipping times and costs for goods between Asia and Europe. According to the Freightos Baltic Index (FBX), a tracker of global freight prices, it now costs an average of $2,600 to ship a 40-foot container—up 150% in the past three months. And now, in some cases, it can take an extra three weeks for goods to arrive. Some punters, with memories of the pandemic fresh in their minds, are worried that this disruption will drive a surge in…