Join us as we chat with Phil Shook, who managed the intermodal division at C.H. Robinson for almost a decade, about the future of transport, industry insights, and key acquisitions.
As we venture into 2024, a sharp spike in international container freight rates suggests an upcoming climb in U.S. goods inflation, potentially disrupting market forecasts. While a significant cutting cycle is anticipated, uncertainty over the inflation trajectory remains unreflected in current market pricing. Analyst Andreas Steno draws a direct line from current shipping costs to future price increases and questions the Fed's next steps.
Critical Observations:
Freight Rates: The Freightco container index nears actual pricing, with rates soaring to $6,000 per box.
Market Impact: The Suez Canal's operational challenges continue, hinting at further inflationary pressures.
Studies link shipping costs directly to inflation: a doubling in freight rates may boost CPI inflation by 0.7 points. The pandemic's freight cost surge, a 600% jump, eventually passed onto consumer prices, a pattern we may see again.
Not everyone agrees on this outlook. Debates on Twitter reflect a spectrum of opinions. While some urge the Fed to take quick action, others question the reliability of freight rates as an inflation indicator, especially in a market still stabilizing from recent shocks.
Just because there's short term correlation, it doesn't mean that historically this has been the case.
Spurious correlaction in my opinion. In 2021-2022 so many shocks tooked place at one time, that it is not right to connect inflation only to freight levels
The conversation is buzzing with varied perspectives – some users see a strategic opportunity amid potential policy errors, while others doubt whether inflation will indeed follow suit. The uncertainty of the times adds to the complexity of predicting the Fed's response.
Hi! I'm Adriana and I've been working for FreightCaviar as Head Writer for a little over a year now. Some of my favorite topics to cover are FreightTech, Green Freight, and nearshoring/reshoring.
President Biden attributes strengthened supply chains and reduced backlogs to his economic plan. Yet, industry insiders counter that the alleviation of bottlenecks results from a dire freight recession, not policy success.
