Of the many things that were messed up during COVID-19 the shipping industry was no exception. Prices have risen almost 4 times from a year ago. The article also mentions how firms are getting desperate and may start sending out faulty ships to try and keep up with demand. I wonder if we could see a backfire of this and having some sort of ship failure causing environmental or damage to the crew members?
Its also interesting to note how the industry was in a very good place until the pandemic happened. After that the number of idle ships went up by 11% then when the stimulus hit the demand went up 27% causing massive delays and prices soaring. Along with all of this important ports in China were closed causing even more confusion in the industry. The article also mentions how it will take maybe over a year for the backlog to be fixed.
What I wonder is that with the delays and all the issues will we see any firms innovate and attempt to come up with new ways to ship goods? I wonder if we will ever see drones sly goods across the ocean and if it will ever be viable price wise. Just something interesting to ponder.
Source: https://www.economist.com/finance-and-economics/2021/09/12/a-perfect-storm-for-container-shipping
2 comments:
I think it is very interesting to look at this topic, especially considering that this is a subject that is commonly overlooked by us as a society. Ever since America has shifted away from manufacturing our own goods, shipping has been something that is heavily relied on. I believe that this would be considered a disequilibria in the market, and should correct itself in due time. Because of the high prices, more players should enter the market, driving down price and inevitably reaching a more sustainable price level for consumers.
Exports and imports are an essential part of the economy. It helps businesses to expand, have more goods in daily life. Many countries rely on imports, especially on imports from China. China exported $480 billion dollars of goods to the US in 2018. America relies on imports from other countries. However, due to pandemics, the government started to see its weakness. In nowadays, shipment strategies have developed in various ways to minimize the number of delays. With new experience during the pandemic, it is very obvious that shipment soon will reach its peak
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