Note — Mar 14, 2021

Chaos Strikes Global Shipping

Seen in → No.164

Source → nytimes.com/2021/03/06/business/global-ship...

There’s been a lot of talk in the last year about broken supply chains, the importance of infrastructure, brittleness, etc. This one at the NYT is a very good overview of the various problems the business of shipping and container management have been experiencing over that time. How about 27x shipping fees in some situations?

The quick summary; when a system is super optimized on a global scale, a big shift in one part reverberates across the system and can take a long while to settle down. Also; don’t count on free markets to optimize for anything other than profit.

“Everybody wants everything,” said Akhil Nair, vice president of global carrier management at SEKO Logistics in Hong Kong. “The infrastructure can’t keep up.” […]

Six months ago, he was paying about $2,500 to ship a 40-foot container to California. “We just paid $67,000,” he said. “This is the highest freight rate that I have seen in 45 years in the business.” […]

Given the prices fetched by containers in Asia, shipping carriers are increasingly unloading in California and then immediately putting empty boxes back on ships for the return leg to Asia, without waiting to load grain or other American exports. That has left companies like Scoular scrambling to secure passage.