A recent surge in ocean-shipping rates to their highest levels in decades is adding upward pressure on already rising commodity prices that could push up the cost of imported goods in the U.S. and other countries. Tuesday's Wall Street Journal reported.
With the demand for seafaring vessels far outstripping supply. the cost of shipping iron ore. soybeans. coal and other commodities used in the manufacture of a wide range of goods has nearly tripled this year. The Baltic Dry Index. the key industry indicator for commodity freight rates. has doubled in just the last two months. Industry officials say there are no signs of relief on the horizon in terms of lower prices or additional supplies of vessels.
China's surging economy is creating a huge demand for ships to import the basic raw materials the country needs to build infrastructure. supply its massive manufacturing sector and satisfy a growing consumer market. As more ships go to China. fewer are available to ferry goods between other countries. causing a supply shortage that helps to boost prices. Compounding the squeeze. shrinking mining industries in the Americas and Europe have increased those regions' imports of coal. while the summer drought in Europe is boosting grain shipments from the U.S.
11/4/2003 6:47:00 AM
Dow Jones Business News