International shipping costs have fallen for the eighth consecutive month, providing relief to businesses and consumers worldwide. The Baltic Dry Index, a key measure of shipping costs, reached its lowest point since early 2020.
The sustained decline in logistics costs reflects a normalization of global trade patterns following years of pandemic-related disruptions. Container shipping rates from Asia to Europe have dropped by 65% from their peak in 2022.
Major retailers are beginning to see the benefits in their profit margins. Walmart reported that reduced freight costs contributed to a 0.4 percentage point improvement in gross margin during the latest quarter.
"The supply chain crisis is definitively behind us," said Dr. Marcus Chen, logistics analyst at Global Trade Institute. "We are now in a period of overcapacity, which is excellent news for shippers but challenging for carrier profitability."
The trend has prompted several major shipping lines to announce capacity reductions. Maersk and MSC have both announced plans to idle older vessels and delay new ship deliveries.
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