COVID-19 has upended global supply chains, with long-established logistics infrastructure in the midst of major upheaval, leading to higher costs and delays.
The latest Drewry Composite World Container index, which tracks shipping costs across the world, has surged 293 per cent in a year — its highest level since the shipping consultancy started tracking the index in 2011. Costs to ship goods from Shanghai to New York has jumped 178 per cent over the past 12 months, while Shanghai to Los Angeles rose 238 per cent. The cost of shipping a 40-foot container from Shanghai to Rotterdam rose to US$10,174, up 3.1 per cent from a week ago and a 485 per cent increase compared to the same period last year.
The Canadian Imperial Bank of Commerce is also warning that bottlenecks in both the manufacturing and construction could cap the pace of the North American economy which is expected to boom post-pandemic.
“There are goods backed up in overseas ports due to a shortage of ships, and the earlier blockage in the Suez Canal,” stated Avery Shenfeld, economist at CIBC, in a report, noting that manufacturers of everything from cars to appliances are waiting for the computer chips they run on.
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