Container Shipping Is Not Just Delayed, It’s Hyperinflated
Oct. 4, 2021 (EIRNS)—The median cost of shipping a standard TEU container from China to the West Coast of the United States was $5,500 in January 2021; $10,800 in July; and hit $20,585 in September, the highest such cost on record. The Washington Post on Oct. 3 reported the container cost paid by a single large wholesaler in Illinois, American Sale Warehouse, most of whose imported goods come from the Chinese port of Ningbo. The price before the pandemic was less than $5,000, but in late August 2021, it was $26,000. This intersects with the delays in this intermodal shipping route, by sea and by truck, which have come to be from three weeks to four months beyond the normal shipping time prior to the pandemic.
The irony of the increasing hyperinflationary economic breakdown, is that one of its originating factors was China’s rapid, strict, and very efficient response to the COVID-19 pandemic, which “could not” be attempted in any trans-Atlantic nation. Thus during 2021, for example, China’s total export trade (to the world) rose from an average of roughly $200 billion/month, to $280 billion/month in June and July, $300 billion in August. (China’s industrial capacity utilization has risen from 74% to 78% during 2021; its industrial production by August finally reached a year-on-year increase of 35%. In America and to some extent Europe, this has triggered breakdown in port, truck, and inland waterway transport. In China, the rising industrial production combined with implementation of “green” anti-coal pledges, has led to blackouts.
The “transitory” inflation wave is now being forecast to last through 2023. This, with particular regard to international shipping rates, is the estimate of Sultan Ahmed Bin Sulayem, the chair and CEO of one of the world’s biggest port operators, DP World (headquartered in Dubai), on Bloomberg TV Oct. 1.