Will Increase In Freight Costs Start Impacting Prices?

It has been a while since we reported the impact of freight costs on inflation. However, its potentially back with a bang. Freightos is reporting 40-foot container prices between China and Rotterdam have increased by 176% in the last 2 weeks to $4,371. This has been caused by disruptions in the Red Sea, due to the ongoing conflict in Yemen and the wider region. Why does this matter? Apart from the obvious impact on importer costs, any sustained cost increases impacts inflation. According to the IMF a doubling of freight costs leads to a near 1% increase in inflation.

The narrative so far has all been about falling interest rates in 2024. However, this is based on falling inflation rates. Any increase in freight costs could lead to stickier inflation. The result could be higher rates for longer. It will be one of the many important parameters to keep an eye on when financing businesses over the next couple of months.

Abcor Finance can fund freight costs, duty, VAT as well as the Purchase Order. If you have clients who are looking to grow in 2024 and need to fund their purchases; give us a call and have a chat 02071578670 or email us