In his new book Outside the box, Marc Levinson aptly defines our modernity as the “age of things”. We literally populate the four walls that we call our home with furniture, electronics and clothing that are shipped from distant lands.
But historically, the industry behind 80 percent of our trade has remained a hidden sector barely noticed by the masses it graciously serves.
A tragedy occurred three months after 2021. A huge ship that Always given, got stuck on the banks of the Suez Canal. It would be the start of a series of events that would catapult shipping into the mainstream media spotlight. During the six days that the ship was stuck, it was a source of amusement for many people who were previously unaware of the existence of these extraordinarily large ships.
On the other hand, the sworn shipping community had much cause for concern. The blockade that Always given causes aggravated congestion at major global shipping hubs along the Suez Canal. In some places, particularly China, port congestion has also been made worse by Covid-19 protocols designed to reduce the spread of the virus.
As a result, major container hubs like Los Angeles / Long Beach, Ningbo and other gateway ports in Europe and Asia saw record-breaking mess. The delays were so severe that retailers were unable to stock many consumer goods on time and manufacturers with long global supply chains struggled to source parts.
Empty grocery store shelves are a major concern for many Western shoppers, and images of empty shop windows have become a staple of prime-time news. At the same time, astronomical freight rates drove up prices for consumer goods in the target markets and made shipping more public. According to Xeneta’s latest freight rate report, European import rates rose 141 percent in December compared to the end of 2020. In the US, import freight rates are up 125 percent compared to the end of last year. For everyday shoppers, this means general price increases for imported goods and thus inflation. Last month, UNCTAD forecast that rising global container shipping rates could drive consumer prices up 1.5 percent over the next year.
This hits deeply for the many people who have been harmed by the economic downturn from COVID – and even for people who secured higher wages for themselves in an economic upswing. “Although gross wages rose 4.8 percent last year, real average hourly wages, including inflation, fell another 0.4 percent in November and fell 1.9 percent over the twelve-month period,” the US said – Department of Labor in a December report.
As of December 6th The New Yorker The magazine showed a container ship on the title page – a ship was only shown for the fourth time in 100 years – shipping enthusiasts saw it as a well-deserved homage to a vital industry. It’s been a year for the record books: Who would have thought that container shipping sales would ever be comparable to those of the largest tech companies? In November, investment firm Blue Alpha Capital found that container shipping profits for the third quarter had outpaced Facebook, Amazon, Netflix and Google (collectively known as the big four “FANG” companies).
âThe $ 48.1 billion in container shipping profit for the third quarter of 21 was nearly 50 percent higher than FANG’s total profit, and the net income-revenue margin of 42.7 percent was nearly three times that. Compared to profit giants Apple and Microsoft combined, the container shipping industry‘s profits were still nearly 15 percent higher with a profit margin that was nearly 30 percent higher, âwrote McCown.
The opinions expressed here are those of the author and not necessarily those of The Maritime Executive.