Global trade shows resilience amid shifting sourcing and rising logistics costs

Global trade is showing robust performance, though shipping lines and ports face increasing challenges due to a rising tide of empty containers. An worsening East-West trade imbalance is driving port congestion and burdening carriers with zero-revenue empty container backhauls.

In the United States, cargo sourcing is shifting; while Chinese exports to the U.S. fell 7.8% year-on-year in July, Vietnam’s exports to the U.S. grew by 8.2%. Additionally, U.S. national average diesel prices rose to $5.454 per gallon during the week of August 17, marking the highest level since May.

Global air freight rates also saw an increase, rising 0.2% during the week of August 17 and sitting 19.2% higher year-on-year, largely driven by jet fuel costs and tensions in the Persian Gulf. Meanwhile, a survey of over 500 global CEOs indicates a high priority on supply chain resilience, with 80% of U.S.-based CEOs stating that up to 20% of their revenue would be at risk if their top three suppliers were disrupted for two weeks.