Report

The Impact of Global Shipping Cost Surges on US Import Price Inflation

Abstract: Global shipping costs have soared to record highs in recent years. Costs spiked during the COVID-19 pandemic, driven by supply chain disruptions, labor shortages, and port congestion. Costs had eased by mid-2023, but they began rising again later that year and into 2024 due to Houthi violence off the coast of Yemen that restricted access to the Suez Canal and a drought at the Panama Canal that limited vessel traffic and forced rerouting around the Cape of Good Hope. As global shipping costs have soared, US import prices also have increased.

Keywords: shipping costs; import prices; cost-price pass-through; inflation;

JEL Classification: E31; F14;

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Current Policy Perspectives

Publication Date: 2024-11-14

Number: 2024-6