General

With the release of PMI reports all over the world (a series of PMI data were released earlier this month), and the comments about rising input costs have been heard time and again, shipping congestion has also played an important role in it.

ANZ Bank (ANZ) published a thought-provoking article on the turmoil in the global shipping industry, pointing out that congestion in the global shipping industry may continue until next year.

The report’s main focus is on the impact on New Zealand exporters (primary producers), but it presents a more widely applicable perspective and global impact.

The bank pointed out that global trade is expected to grow by 8% in 2021 and a further growth of 6% in 2022, indicating that shipping demand will not decrease in the short term.

ANZ Bank pointed out that in order for shipping demand to return to normal, part of global consumer demand for goods must be weakened, either because of the reversal of the huge replacement of goods by holidays to a certain extent with the reopening of tourism, or because of the global Consumers (especially in the US) feel the need to be more cautious in spending.

In the ANZ Bank report, analysts once again specifically mentioned soaring shipping charges.

From today's research report (on the export prices of New Zealand goods):

There is no sign of any decline in global shipping costs. Although the port has now resumed full capacity operation, it will take several months to clear the backlog of cargo.

The transportation costs of both container ships and bulk carriers are soaring. The Baltic Dry Bulk Freight Index rose 30% in June, a record high. The congestion in the shipping industry is expected to be relieved for a long time next year.

The Fed and other central banks are watching developments, trying to determine whether the inflation seen is only temporary. But not everyone thinks so.

Mohamed El-Erian, Allianz’s chief economic adviser, said that inflation is not “temporary” but will continue (starting in May, so far, his view has been proven correct).

El-Erian worries that inflation will not be temporary, and there is too much "actual evidence" that inflation will remain high.