The UN warned on Thursday that a surge in container freight rates could increase consumer prices next year if problems in the global supply chain are not addressed soon.
The UN’s trade and development agency (UNCTAD) said that if the current surge in freight rates persist, global import price levels could increase by 11 percent and consumer price levels by 1.5 in 2022.
“The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,” said UNCTAD Secretary General Rebeca Grynspan.
Demand for goods spiked during the COVID-19 pandemic as consumers spent more money on goods than services during lockdowns, with increased deliveries causing unprecedented pressure on supply chains, according to UNCTAD’s Review of Maritime Transport 2021 report.
The surge in demand was mismatched by a transportation industry that was constrained by logistics bottlenecks and labor shortages fueled by pandemic restrictions, causing freight rates to go up.
Impacts of high prices will vary across different economies, UNCTAD noted. The effects will be mostly felt in small-island countries that are dependent on imports, where import prices could increase by 24 percent and consumer prices by 7.5 percent.
Low-income countries could see consumer price levels increasing by 2.2 percent.
“Returning to normal would entail investing in new solutions, including infrastructure, freight technology and digitalization, and trade facilitation measures,” Grynspan said.
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