Higher shipping costs from China threaten to drive up UK inflation — Coface

The price of shipping a 40-foot container from China to the UK has surged about 60% to reach $3,305 over the past three months. The rise was driven by stronger demand from American companies, rushing to stock up on goods before the Trump administration imposes new tariffs. This has absorbed capacity of shipping on trade routes not only to the US but also to Europe.

Increased shipping rates are reflected in prices of goods sitting on the shelves. British retailers are now facing low profits and high costs, which forces them to pass on added expenses to customers. Jonathan Steenberg, economist at Coface, says rising shipping costs could push inflation in the UK up to 3.6% in the third quarter.

The current spike could prove to be short-lived, yet companies are already under pressure from an increase in the minimum wage and payroll taxes. According to the Office for National Statistics, almost 40% of firms are concerned about supply chains. Chief analyst at Xeneta Peter Sand projects shipping costs to remain elevated throughout the year due to disruptions at ports and labor shortages.