The cost to ship a standard 40-foot container of goods from Shanghai to New York has risen to nearly $10,000.
That's because cargo ships are taking the long way around Africa to avoid Houthi rebels in the Suez Canal.
A much longer route puts a squeeze on container vessels and ultimately leads to higher shipping rates on things like toys and auto parts.
The Drewry World Container Index's spot rate for such a shipment hit $9,387 on July 11, up more than double the rate from February, Reuters reported.
Shipping rates may soar even higher. Greg Davidson, CEO of Lalo, told Reuters he expects $20,000 per container.
Importers may also rush to ship goods to the U.S. Fears are spreading that imports could face sweeping tariffs if former President Donald Trump wins the 2024 election in November.
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The closely watched Shanghai Containerized Freight Index rate for Shanghai to the U.S. West Coast topped $8,100 this month to set a new record. Sea cargo volumes remain below early pandemic highs.
Drewry's index had the rate on that trade lane at around 60% of its pandemic peak of $12,400 per container.
Price Action: Exchange-traded funds that track shipping container stocks saw modest gains and declines by Monday's late-afternoon trading.
First Trust US Equity Opportunities ETF (NYSE:FPX) gained 0.85%, while Leatherback Long/Short Alternative Yield ETF (NYSE:LBAY) inched up 0.01% and Invesco MSCI Global Timber ETF (NYSE:CUT) slipped 0.06%.
Carbon Collective Climate Solutions U.S. Equity ETF (NASDAQ:CCSO) declined 0.40% and ProShares UltraShort Materials (NYSE:SMN) slipped 0.42%.
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