When central bankers explain what keeps them up at night, the list is usually the same: wages, services prices, expectations. All sensible. What is almost never on it is the price of moving a box across an ocean.
That is a mistake. Freight is not the whole story of inflation, but it is often the first chapter, and it arrives early.
Freight moves first
A container rate is a price set every week in a market with thousands of buyers and a few dozen sellers. It reacts to demand before the goods are made, because an importer books space before the factory ships. It reacts to supply shocks as they happen, because a closed canal or a congested port changes the rate that afternoon.
The goods on that ship reach a shelf four to twelve weeks later. Their price reaches the consumer index some time after that. The chain is slow, but it runs in one direction.
Our data desk tested this against the Break Freight Index. Across the last decade, large moves in the index were followed by moves in the same direction in imported goods prices, with a lag of roughly two to three quarters. The relationship is loose, and our sample includes only a handful of big shocks. But it held in both directions.
Where the signal is noisy
I can hear the objection, because I have made it myself. Freight costs are a small share of the final price of most goods. A television that sells for several hundred euros might carry a few euros of ocean freight. Double the rate and the retail price barely notices.
True for a television. Less true for furniture, tiles, animal feed or anything bulky and cheap, where freight can be a fifth of the landed cost. And the rate itself is rarely the only thing that moves. When freight spikes, it is usually because something else is going wrong: ships are stuck, factories are rushing, inventories are thin. The rate is less a cost than a thermometer.
It is also a thermometer with a short delay. Wage settlements are negotiated once a year. Services prices adjust slowly. Freight reprices every week, in public, and often at the first sign of trouble.
Dieter Kranz, chief economist at Nordhafen Bank, a trade-finance lender in Hamburg, puts it more bluntly. "When my clients start paying for express space, I know their customers are pulling orders forward. Six months later that shows up in the price statistics as a surprise. It was not a surprise to them."
A better dashboard
I am not arguing that a policy rate should follow the container market. That would be absurd, and the market is too volatile for it. I am arguing that the dashboard should include it, beside wages and services and energy, with the same seriousness.
That means a few specific habits. Track the spot rate on the lanes that feed your economy, not a global average. Watch the gap between spot and long-term contract rates, which tells you how desperate importers are. Read the anchorage counts at your main ports. None of this needs new data; most of it is published, and some of it is on our own maps.
A habit, not a mandate
Central banks are rightly wary of new targets. Nobody wants another variable for commentators to demand action on. This is not a target. It is an early warning, and the cheapest one available.
The last time freight rates exploded, the price indices took most of a year to follow. Anyone reading the shipping pages at the time had a head start. It would be good if next time the rate-setters were among them.
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