Did you imagine lockdowns in Shanghai and Shenzhen would drive up the cost of transporting goods from China to Europe? If you did, then you’d be wrong.

Here’s what’s happened to the price of taking a 40ft container’s-worth of goods from the Far East to Northern Europe on short notice:

The data comes courtesy of shipping specialists Xeneta.

On the Far East to South America East Coast route prices have fallen so dramatically that they’re now lower than they were at this point last year:

Xeneta’s data shows spot prices on the Far East to US West Coast artery remaining broadly flat. But others are seeing big falls here too. Here’s the latest figures for rates on the China to LA route from freight forwarders Shifl:

What’s happening here exactly? Well the slump may be down to the time of the year. There’s often excess capacity around the time of the Lunar New Year, when Chinese factories close. Shabsie Levy of Shifl expects prices to rise again during peak season in the summer, though not to the levels witnessed in 2021.

The fall in spot rates could also be down to shippers — that is, exporters — preferring to lock in their transportation costs for the longer term. Peter Sand of Xeneta told us that longer-term contract rates on the Far East to Northern Europe route had jumped by 6 per cent over the past month to $9,800 per 40ft box. Businesses were, he said, desperately seeking shelter from all the supply chain volatility, and hoping that closer relations with the carriers through longer term contracts would lift the appallingly low reliability of when their goods will leave Asia, and arrive at their final destination.

Yet it looks to us as though lower trade volumes might be a factor too. This chart, courtesy of Container Trade Statistics, shows the drop off this Lunar New Year has been far more severe than in February 2021:

That suggest we may be seeing a drop-off in demand for goods in the Americas and Europe.

This market has been so stormy since the pandemic began that we’re not going to make any big macro calls on the back of these drops, deep and interesting though they may be.

But we need to keep an eye on shipping rates in the coming weeks and months. A factor in the surge in prices during the pandemic was people stocking up on goods, most of which are brought to us from Asia in these big steel boxes. If that trend is now going into reverse, then inflation might sink too.