The Rising Influence of Rising Affluence

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Ocean Shipping Rates Begin to Decline

https://www.ttnews.com/articles/ocean-shipping-rates-begin-decline

Transpacific shipping costs have fallen by 53% in the past three months, and on July 8 it cost $7,409 to transport a 40-foot container from China to the nation’s largest gateways for trade on the West Coast on a long-term contract.

According to the Freightos Baltic Index, that same container cost $15,764 to transport April 15. The drop in shipping prices comes as the Ocean Shipping Reform Act has been in effect for about a month. The law gives the Federal Maritime Commission more tools to regulate the shipping industry, and the relatively small federal agency is now in the process of hiring more investigators to oversee and monitor ocean carriers.

On the East Coast, shipping rates from China to the Atlantic Ocean are down 43%. On April 15, it cost $17,150 to move a 40-foot container, and in early July the price was $9,882.

Bentzel said the soaring price of shipping imported items from China to the U.S. is a key factor in the increasing inflation, and he’s encouraged that shipping costs are declining. But that doesn’t mean the soon-to-be larger FMC will be backing off of its newly expanded mission. In fact, he said the new law will provide just the opposite.