Global Supply-Chain Pressure Hits Record Low

Global logistics challenges are at their lowest level in 26 years as transportation costs keep declining, according to a gauge maintained by the Federal Reserve Bank of New York.

The regional Fed bank’s Global Supply Chain Pressure Index fell to minus 1.74 in October, the lowest in records back to 1997, it said on its website.

Zero represents the historical average, and changes in either direction mark standard deviations from that trend. The gauge has recorded nine straight months of negative readings. The cost of moving goods by rail, truck, sea and air has declined from record highs set during the pandemic.

The index brings together 27 variables that take the temperature of everything from cross-border transportation costs to country-level manufacturing data in various nations and regions.

A number of commonly used metrics are used to track global transportation costs. They include the Baltic Dry Index, a measure of costs to ship bulk materials, and the Harpex gauge, which shows worldwide price development for container ships. Air freight costs and supply chain-related components from Purchasing Managers’ Index surveys are also included.

Source: Bloomberg