We may be underestimating just how much the shipping crisis will raise prices of consumer goods, a leading economist says

A shortage of workers, lack of shipping containers, and massive port traffic jams caused by growing demand for imported goods are all causing shipping costs to soar, Insider's Rachel Premack reported. According to the Drewry World Container Index, shipping containers cost nearly four times as much as they did this time last year. Ports face other problems, too. Authorities introduced stricter COVID-19 measures after a recent coronavirus outbreak in Guangdong, South China, causing congestion at four major ports.

The shipping problems, in turn, are spurring shortages of products ranging from semiconductors and fireworks to chicken and Starbucks drinks. Prices hikes could follow, too, as some companies, including Costco and Chipotle, have already warned that they may pass some of the the higher freights costs to their customers, while analysts told Bloomberg that the prices of low-cost and bulky goods, like toys and cheap furniture, could soar in the coming months.

The shipping crisis means that customers could also have less access to international products, too.  Jordi Espin, strategic relations manager at the European Shippers' Council, told Bloomberg that olive growers in Europe could no longer afford to export to the US.  And Europe has stopped most anchovy imports from Peru because they're no longer competitive compared to local products, he said.

HSBC trade economist Shanella Rajanayagam told Bloomberg that he expects consumer demand to shift from goods to services as the global economies reopens.  But Rajanayagam warned that the higher shipping costs could stay post-pandemic, and that producers could become more willing to pass these higher costs on to consumers.

This is an excerpt from The Business Insider.