International freight rates increased dramatically: WTO
International freight rates have risen dramatically, as evidenced by the fact that Shanghai’s containerized freight rate has nearly quadrupled in the past year, the World Trade Organization (WTO) noted.
The rebound in freight rates coincided with a strong recovery in the new export orders component of the global manufacturing purchasing managers’ index, indicating a strong increase in global import demand.
The prices of inputs for manufacturing and final goods also increased, while stocks of finished goods were reduced and delivery times were extended.
Likewise, the new export orders index peaked at 54.9 in May this year, but has since fallen to 51.0 in August, which seems to indicate a cooling in global import demand.
At the same time, input prices and ex-factory prices have started to decline, delivery times have stabilized, and merchandise stocks have increased.
This seems to indicate that high shipping rates and delays for ships waiting to unload goods at ports may have peaked, although it may take some time for prices to drop and delays absorbed. .
International freight
Despite the disruptions related to the Covid-19 pandemic, container traffic in international ports remains at or near all-time highs.
Manufacture
The IHS-Markit purchasing manager indices are based on studies of hundreds of companies from more than 40 countries.
Likewise, the indices of the purchasing managers of the various countries are added together to form a global index, with values above 50 indicating expansion and values below 50 indicating contraction.
Global Manufacturing Purchasing Managers Indices, January 2018-August 2021
The Global Manufacturing Purchasing Managers Index and selected sub-indices shown in Chart 5 shed light on recent congestion problems at ports (with much longer delivery times, as reflected by the substantial deterioration of the sub-index, far behind below 50) and high prices for shipping services.
