Box A: Does the Recent Rise in Shipping Costs Warn of Higher Inflation?

Ahmet Kaya (), Edmund Cornforth and Barry Naisbitt ()

National Institute Global Economic Outlook, 2024, issue 16, 14-20

Abstract: In late 2023 the firing of missiles by Houthi rebels in Yemen at commercial shipping in the Red Sea led to some shippers re-routing cargoes away from the Suez Canal and round the Cape of Good Hope. This led to longer times and increased costs for some shipping routes, particularly to Europe. In this Box, we first examine the recent evolution of shipping costs. We then examine the impact of changes in shipping costs on import prices and consumer inflation in OECD countries using the local projections method and draw out the implications for consumer price inflation in the near term.

Date: 2024
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