Pressures on global supply chains are showing signs of easing, and this trend should lead to lower price pressures on commodities in the coming months.
Ports and warehouses are still congested compared to pre-pandemic, and businesses are still battling much higher than usual shipping rates and delivery times. Still, this smoother-functioning supply chain could provide her one source of relief to an economy still struggling with rapid inflation. Rising demand, coupled with chronic shortages and delays in delivery of some products, have pushed up prices for cars, toys, furniture, food and other commodities.
Inflation data released Wednesday morning showed prices of some commodities had started to fall. Apparel costs fell 0.1% month-on-month as prices of men’s shoes, women’s coats and baby clothes fell. Prices for major electronics fell 2.2%, while jewelery he fell 1.2%.
Other commodities such as women’s dresses, living room furniture and household paper products continue to rise in price.
“We are now easing massive traffic congestion,” said Phil Levy, chief economist at freight forwarder Flexport.
The cost of moving goods has retreated in recent months from last year’s stratospheric highs. For example, an importer is currently paying about $6,632 on the spot market to move his 40-foot container from China to the West Coast of the United States. This is where he was at $18,346 at this point last year (although significantly higher than his $2,900 two years ago). To data from Freightos Group. Currently, the average delivery time over the same route is about 74 days, down from his peak January of 99 days.
An indicator of pressure on global supply chains produced by the Federal Reserve Bank of New York also shows a downward trend in pressure since December.
Eytan Buchman, Freightos’ chief marketing officer, said freight rates remain high and ports are still congested, but “overall, it’s clear we’re on the road to normalization.” increase.
