 The Havoc Begins Like This |
Source |
American Shipper |
Post Date |
03/17/2021 |
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More than a decade ago, during the global financial crisis, shipping companies saw their businesses savaged.
As a mysterious virus emerged in China early last year ¡ª prompting the government to shut factories to contain its spread ¡ª the shipping industry braced for a replay. Carriers cut their services, idling many of their vessels.
Yet even amid the downturn, orders surged for protective gear like surgical masks and gowns used by frontline medical staff, much of it made in China. Chinese factories ramped up, and container ships carried their products to destinations around the planet.
Unlike the financial crisis, when the economic recovery took years to gather force, Chinese factories came roaring back in the second half of 2020, yielding robust demand for shipping.
As shipping companies deployed every vessel that could float, they concentrated on routes with the greatest demand ¡ª especially China to North America.
Pressure built as Americans refashioned their sping. Deprived of vacations and restaurant meals, they bought video game consoles and pastry mixers. They outfitted their homes for remote work and distance learning.
Exercise equipment shipped by container from Asia to North America more than doubled between September and November, compared with the same period a year earlier, according to analysis by Sea-Intelligence, a Chagen-based research company. Shipments of stoves, ranges and cooking equipment nearly doubled in that span. Disinfectants increased by more than 6,800 percent.
¡°All of the stuff that¡¯s been growing has been basically pandemic induced,¡± said Alan Murphy, the research group¡¯s founder.
Viewed broadly, the volume of global trade dipped by only 1 percent in 2020 compared with the previous year. But that doesn¡¯t reflect how the year unfolded ¡ª with a plunge of more than 12 percent in April and May, followed by an equally dramatic reversal. The tem could not adjust, leaving containers in the wrong places, and pushing shipping prices to extraordinary heights.
Peter Baum¡¯s company in New York, Baum-Essex, uses factories in China and Southeast Asia to make umbrellas for Costco, cotton bags for Walmart and ceramics for Bed Bath & Beyond. Six months ago, he was paying about $2,500 to ship a 40-foot container to California.
¡°We just paid $6,000 to $7,000,¡± he said. ¡°This is the highest freight rate that I have seen in 45 years in the business.¡±
In early September, he waited 90 days to secure space on a ship for a container of wicker chairs and s.
Another U.S. importer, Highline United, which imports women¡¯s shoes from China and Hong Kong for brands like Ash and Isaac Mizrahi, is paying more than five times its usual price for shipping.
¡°It¡¯s a classic supply and demand issue,¡¯¡¯ said Kim Bradley, the chief operating officer of the company, which is based
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