The Harpex reflects the worldwide price developments on the charter market for container ships; it is published weekly by Harper Petersen and Company. It is an industry standard for gauging the market rates for moving goods across the sea. From the beginning of 2021 to the early months of this year the Harpex more than quadrupled. It was an important factor in the rise of inflation rates around the world…but as it turns out, that is yesterday’s news.
In the last couple of months, the Harpex has crashed; it has fallen by two thirds. The rate of decline is faster than the pace of the increase seen the year before. While that may be a drag on the inflation rate at some point, the IMF thinks that will only come with a considerable lag.
According to the IMF, “Studying data from 143 countries over the past 30 years, we find that shipping costs are an important driver of inflation around the world: when freight rates double, inflation picks up by about 0.7 percentage point. Most importantly, the effects are quite persistent, peaking after a year and lasting up to 18 months. This implies that the increase in shipping costs observed in 2021 could increase inflation by about 1.5 percentage points in 2022.”
This of course makes for an added complexity as the markets and the Fed try to judge the moment when inflation is no longer a problem. For shipping, in any case, the emergency will be over long before the data indicates that is the situation.
Lou Brienis Strategist / Knowledge Manager at DRW Trading in Chicago. Lou has been at DRW Trading since 1999 and in the markets since 1983.
SOON… THERE WAS A CONTAINER SHORTAGE…
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500
max 4,586.25
max 3,009.81
max 783.96 01-Jan 2021 01-Apr 01-Jul 01-Oct 01-Jan 2022 01-Apr 01-Jul 01-Oct
33 | ADMISI - The Ghost In The Machine | Q3 Edition 2022
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