CRASHING CONTAINERS!
Container Units…and their role in influencing Inflation!
Prices go up and prices go down, but sometimes the rate of inflation doesn’t reflect it.
More than eighty percent of the world’s traded goods travel from producer to consumer by sea, says the International Monetary Fund (IMF). Most of those goods are moved about inside 20-foot (6.100 metre) and 40-foot (12.025 metre) steel containers, stacked one on top of another.
When the pandemic hit and social lockdowns became widespread, the process of moving goods on container ships, like most aspects of life, was disrupted. Not only were there port bottlenecks that drastically slowed the unloading of the container ships but there was also the problem of containers being left in the middle of the country after the delivery had been made. Getting containers back to the producers, in China and elsewhere, so they could be refilled and sent out with a fresh supply of goods became part of the supply chain struggles.
Average annualized price
$7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
2010 Source: Drewry 2015 2020
Soon there was a container shortage, despite a doubling of production since 2019. The Wall Street Journal reported on the situation back in the summer of 2021, “John Fossey, head of container equipment and leasing research for London-based Drewry, said that in principle there are more than enough containers to handle global trading volumes. In practice, he said, availability in several parts of the world has become incredibly tight because large volumes of containers are stuck in
the wrong place.” The “shortage” of containers was an early contributor to the inflationary pressures that began to surface in early 2021, as prices for the containers shot up to almost twice as high as they were five years earlier.
So, there was the double hit in the price for shipping goods from producer to consumer. The jump in prices of the containers that the goods are stored in during the journey from point A to point B…but of course there was also the price to secure a place on the ship itself, which did a lot more than double during the rebound from the depths of the pandemic lockdown in early 2021. That mattered for the surging inflation rate during that time and as it turns out it still matters long after the price hike has come and gone.
32 | ADMISI - The Ghost In The Machine | Q3 Edition 2022
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40
