The inflationary impact of the costs of shipping is likely to grow until the end of 2022

The analysis, which takes note of the strong Covid-19 pandemic in economies, explains that the cost of shipping a container on the world's transoceanical routes has increased sevenfold in the 18 months since March. 2020, month in which the health crisis has manifested itself globally, and that the cost of shipping bulk shipments has increased to an even greater extent. The new research-said Carrière-Swallow, Deb, Furceri, Jiménez Ostry-shows that the inflationary impact of the higher costs of shipping is likely to continue to grow until the end of this year.

The analysis also notes that, taking into account data from the last 30 years of 143 nations, it is pointed out that shipping costs are an important driver of inflation : when maritime transport tariffs doubles, inflation increases by about 0.7 percentage points. It is also a rather persistent effect, with a spike after one year and a duration of up to 18 months. This implies, the researchers noted, that the increase in shipping costs observed in 2021 could increase inflation by around 1.5 percentage points in 2022.

The study also notes that if the impact of shipping on inflation is lower than that of fuel or food prices that account for a larger share of consumer purchases, the costs of shipping are much more volatile and, as a result, the contribution to changes in the rate of inflation due to changes in shipping fares is quantitatively similar to the change generated by sudden changes in oil prices and of the food.

Research then dwells on the speed of the impact of changes in the cost of shipping, noting that higher costs affect the prices of imported goods within the two months and rapidly pass on to producer prices, which generally rely on imported materials and equipment to produce the goods. Instead the impact on prices that consumers pay to the crate is more gradually manifesting itself, reaching the peak after 12 months. This is a much slower process than it has been after an increase in oil prices, which motorists are aware of at the pump within a couple of months, the researchers said.

Moreover, the increase in the costs of shipping affects inflation in some nations more than in others, based on the structural characteristics of their economies : nations that import more than they consume record increases. greater than inflation, as well as those that are more integrated into global supply chains. Similarly, nations that typically pay higher transport costs-such as landlocked countries, low-income ones and especially island states-record an increase in inflation when these costs grow.

The research also underlines the important role that a strong and credible monetary policy can play in mitigating the indirect effects caused by the impact of import prices and inflation. According to the analysis, keeping inflation expectations stable is essential to contain the effect of rising sea freight costs on consumer prices.