Markets
Charted: The Dipping Cost of Shipping
The Dipping Cost of Shipping
A little over one year ago, congestion at America’s West Coast ports were making headlines, and the global cost of shipping containers had reached record highs.
Today, shipping costs have come back down to Earth, with some routes approaching pre-pandemic levels. The graphic above, using data from Freightos, shows just how dramatically costs have fallen in a short amount of time.
The Freightos Baltic Index (FBX)โa widely recognized benchmark for global freight ratesโhas fallen 80% since its peak in late 2021.
Shipping Route | Peak Price (Last 90 days) | Recent Price | Change |
---|---|---|---|
East Asia -> North America West | $2,702 | $1,323 | -51% |
North America West -> East Asia | $1,037 | $805 | -22% |
East Asia -> North America East | $6,296 | $2,812 | -55% |
East Asia -> North Europe | $4,853 | $2,978 | -39% |
North America East -> North Europe | $850 | $552 | -35% |
North Europe -> North America East | $7,102 | $5,507 | -22% |
Why Shipping Costs Matter
The vast majority of trade is conducted over the world’s oceans, so skyrocketing shipping costs can wreak havoc on the global economy.
A recent study from the IMF, which included 143 countries over the past 30 years, found that shipping costs are an important driver of inflation around the world. In fact, when freight rates double, inflation increases by 0.7 of a percentage point.
Of course, some nations feel the effects of higher shipping costs more acutely than others. Countries that import more of what they consume and that are more integrated into the global supply chain are more likely to see inflation rise as shipping costs elevate.
Falling Freight Rates Are a Good Thing, Right?
Falling shipping costs are great news for everyone except, well…shippers.
While most of us can eventually look forward to improved supply chain efficiency and less inflationary pressure, shipping companies are seeing the end of a two-year boom period.
For example, major shippers like COSCO and Hapag-Lloyd saw a staggering 10x or more increase in profit per 20-foot equivalent unit (TEU) shipped.
For the time being, carriers are canceling voyages and sending obsolete ships to scrap to keep prices from bottoming out completely. In early January, container spot freight rates rose for first time in 43 weeks, signaling that the rollercoaster ride that shipping rates have been on since the start of the pandemic may be coming to an end.
Markets
Mapped: 2023 Inflation Forecasts by Country
Inflation surged on a global scale in 2022, hitting record-level highs in many countries. Could it finally subside in 2023?

Mapped: 2023 Inflation Forecasts by Country
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Inflation surged on a global scale in 2022, hitting record-level highs in many countries. Could it finally subside in 2023?
In the above infographic, we look to answer that question using the World Economic Outlook report by the International Monetary Fund (IMF).
Not Yet Out of the Woods
While the IMF predicts that global inflation peaked in late 2022, rates in 2023 are expected to remain higher than usual in many parts of the world. Following the 8.8% global inflation rate in 2022, the IMF forecasts a 6.6% rate for 2023 and 4.3% rate for 2024 based on their most recent January 2023 update.
For the optimists, the good news is that the double-digit inflation that characterized nearly half the world in 2022 is expected to be less prevalent this year. For the pessimists, on the other hand, looking at countries like Zimbabwe, Venezuela, Turkey, and Poland may suggest that we are far from out of the woods on a global scale.
Here are the countries with the highest forecasted inflation rates in 2023.
Country / Region | Projected Annual Inflation % Change 2023 |
---|---|
๐ฟ๐ผ Zimbabwe | 204.6% |
๐ป๐ช Venezuela | 195.0% |
๐ธ๐ฉ Sudan | 76.9% |
๐ฆ๐ท Argentina | 76.1% |
๐น๐ท Turkiye | 51.2% |
๐ฎ๐ท Islamic Republic of Iran | 40.0% |
๐ฑ๐ฐ Sri Lanka | 29.5% |
๐ช๐น Ethiopia | 28.6% |
๐ธ๐ท Suriname | 27.2% |
๐ธ๐ฑ Sierra Leone | 26.8% |
๐ธ๐ธ South Sudan | 21.7% |
๐ญ๐น Haiti | 21.2% |
๐ฌ๐ญ Ghana | 20.9% |
๐ต๐ฐ Pakistan | 19.9% |
๐ณ๐ฌ Nigeria | 17.3% |
๐พ๐ช Yemen | 17.1% |
๐ฒ๐ผ Malawi | 16.5% |
๐ต๐ฑ Poland | 14.3% |
๐ฒ๐ฉ Moldova | 13.8% |
๐ฒ๐ฒ Myanmar | 13.3% |
๐ญ๐บ Hungary | 13.3% |
๐ง๐พ Belarus | 13.1% |
๐ฐ๐ฌ Kyrgyz Republic | 12.4% |
๐ฌ๐ณ Guinea | 12.2% |
๐ฒ๐ณ Mongolia | 12.2% |
๐ช๐ฌ Egypt | 12.0% |
๐ฆ๐ด Angola | 11.8% |
๐ฐ๐ฟ Kazakhstan | 11.3% |
๐ธ๐น Sรฃo Tomรฉ and Prรญncipe | 11.2% |
๐ท๐ด Romania | 11.0% |
๐บ๐ฟ Uzbekistan | 10.8% |
๐ฆ๐ฟ Azerbaijan | 10.8% |
๐น๐ฒ Turkmenistan | 10.5% |
๐ธ๐ฐ Slovak Republic | 10.1% |
๐จ๐ฌ Democratic Republic of the Congo | 9.8% |
๐ฟ๐ฒ Zambia | 9.6% |
๐ช๐ช Estonia | 9.5% |
๐ฒ๐ช Montenegro | 9.2% |
๐ง๐ฉ Bangladesh | 9.1% |
๐ฌ๐ง United Kingdom | 9.0% |
While the above countries fight to sustain their purchasing power, some parts of the world are expected to continue faring exceptionally well against the backdrop of a widespread cost-of-living crisis. Many Asian countries, notably Japan, Taiwan, and China, are all predicted to see inflation lower than 3% in the upcoming year.
When it comes to low inflation, Japan in particular stands out. With strict price controls, negative interest rates, and an aging population, the country is expected to see an inflation rate of just 1.4% in 2023.
Inflation Drivers
While rising food and energy prices accounted for much of the inflation we saw in 2022, the IMF’s World Economic Outlook highlights that core inflation, which excludes food, energy, transport and housing prices, is now also a major driving factor in high inflation rates around the world.
What makes up core inflation exactly? In this case, it would include things like supply chain cost pressures and the effects of high energy prices slowly trickling down into numerous industries and trends in the labor market, such as the availability of jobs and rising wages. As these macroeconomic factors play out throughout 2023, each can have an effect on inflation.
The Russia-Ukraine conflict and the lingering effects of the COVID-19 pandemic are also still at play in this yearโs inflation forecasts. While the latter mainly played out in China in 2022, the possible resurgence of new variants continues to threaten economic recovery worldwide, and the war persists in leaving a mark internationally.
The confluence of macroeconomic factors currently at play is unlike what weโve seen in a long time. Though the expertise of forecasters can give us a general understanding, how they will actually play out is for us to wait and see.
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