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The economic slowdown in China is reverberating across the globe, especially in terms of shipping costs. China’s biggest trade partner is the USA.0
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But the China slowdown is crushing shipping costs as demand for shipments declines.
According to Reuters, shipping freight rates for transporting containers from ports in Asia to Northern Europe plunged by 27.9 percent to $295 per 20-foot container (TEU) in the week ending on Friday, one source with access to data from the Shanghai Containerized Freight Index told Reuters.
The drop came after spot freight rates on the world’s busiest route dropped 39.3 percent last week, and the current rates are widely seen as loss-making levels for container shipping companies.
The spot freight rates for transporting containers, carrying anything from flat-screen TVs to sportswear from Asia to Northern Europe, has fallen 70 percent in three weeks.
In the week to Friday, container freight rates fell 22.5 percent from Asia to ports in the Mediterranean, dropped 8.6 percent to ports on the U.S. West Coast and were down 8.0 percent to ports on the U.S. East Coast.
The Baltic Dry Index has already hit an all-time low, declining 62% YoY. The Shanghai Containerized Freight index is down 49% YoY. Do I detect a trend in the shipping cost numbers, particularly since August.
I wonder if The Federal Reserve will take these horrible global trade numbers into account for the December meeting … or will they be written off as “transitory”?
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