Shipping Costs to Add 1.6 Percent to Inflation, According to Report
GENEVA — The sharp rise in global shipping costs — spurred by the war in Ukraine and the spike in energy prices — is projected to lead to an additional 1.6 percent increase in consumer prices worldwide and induce an average rise of 11.9 percent in global import price levels, a United Nations report said.
Higher energy prices, it said, exacerbate the challenges faced by shippers.
More from WWD
The Russian Federation is a leading oil and gas exporter.
“Confronted with trade restrictions and logistical challenges, the cost of oil and gas has increased as alternative sources of supply, often at more distant locations, are called upon,” said the report by the U.N. Conference on Trade and Development, “Maritime Trade Disrupted: The War in Ukraine and Its Effects on Maritime Trade Logistics.”
Higher energy costs, the report said, have led “to higher marine bunker prices, increasing shipping costs for all sectors. By the end of May 2022, the global average price for very low sulfur fuel oil had increased by 64 percent with respect to the start of the year.”
UNCTAD analysts also noted that “the average fuel surcharges charged by container shipping lines have risen close to 50 percent” since the beginning of the war on Feb. 24 with the invasion of Ukraine by Russia.”
Meanwhile, the leaders of the G7 at the end of their summit in Elmau, Germany, on Tuesday declared, “We will continue to impose severe and enduring costs on Russia to help bring an end to this war.”
“Beyond its direct implications, Russia’s aggression is impeding the global recovery and dramatically worsening energy security and access to food globally. To this end, we remain steadfast in our commitment to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every stage.”
However, the UNCTAD study highlights that increased costs “are a challenge for all traders and supply chains, particularly smaller shippers who are less able to absorb the additional expense and disadvantaged when they are negotiating rates and booking space on ships.”
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
