Slowing demand, and the stagnation of the U.S. economy, has started to reduce the cost of shipping rates nationally. The reduction in transportation costs has caused some companies to renegotiate their existing shipping agreements, after a surge in pricing caused by the pandemic.
This is good news for commodities producers and retailers, because after two years, they are starting to get some relief. Rates shot up to nearly $8,000 per container between June 2021 and June 2022, according to Norwegian transportation data firm Xeneta.
This does not mean that shipping rates have returned to pre-pandemic levels, however. The rate of shipping a container from China to the West Coast of the US was more than four times higher in July than the rate of the same service in 2019, according to freight marketplace Freightos. One thing stopping rates from returning to their pre-pandemic levels is still the congestion in the system, primarily noticeable on U.S. rail systems.