Shipping Container and Ocean Delivery Crisis on Our Doorstep-This Means Hyperinflation and Sharply Increased Lack of Availability of Imported Goods
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Photo Credit: supplychain247
By Stan Szymanski
Just last week Liz Ann Saunders, Chief Investment Strategist at Charles Schwab and Co. Inc. reported the following on LinkedIn:
…’Per data from National Retail Federation and Hacket Associates, U.S. container imports through major ports will reach 24.9 million measured in 20-foot equivalent units … up 12% from last year and close to 2021/2022 levels’…
Sounds like a positive economic indicator…on the surface…Time to dig a little deeper…
…’CONTAINER RATES spiked months ago as shipping firms had to redirect traffic around the Horn of Africa due to MidE (Mid-East) situation. Costs passed on to consumers (who else). Inflationary. ‘…(Brian Byrne-Investment Committee Member at Assembler Growth Capital, LLC)
The question I posed to Ms. Saunders (and commented to Brian) was to basically say: Why is Saunders quoting rates on -20 foot- shipping containers? Anytime you look at a ocean ship transporting containers (like the above pic)-The shipping containers you see is only made up of a minority of the 20 foot containers-It is the bigger, standard -40 foot-shipping containers that rule the oceans.
…and the costs for those 40 footers has soared:
…’Container freight rates oscillated dramatically between January 2023 and August 2024. Freight rates slumped to their lowest level on the 26th of October 2023, when the going rate for a 40-foot container was only 1,342 U.S. dollars. Since then, the global freight rate has significantly increased, hitting over 5,900 U.S. dollars in July 2024, the highest value on record’…(Statista.com)
As Mr. Byrne stated, this is inflationary. Quite inflationary.
With rates for the 40 foot containers going from $1,342 in October 2023 to $5,900 in July of 2024 this represents an increase in the cost of importing goods from overseas (the US imports the most goods in world commerce) of over 400% during the aforementioned 20 month period.
Why didn’t Ms. Saunders report on what was going on with the 40 foot shipping containers? Perhaps Ms. Saunders was looking for one good piece of news to report on in a sea of inflationary statistics. Perhaps it would have been more forthright to have reported the obvious.
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A rudimentary calculation places the cost of importing goods into the U.S. increasing at a 20% per month inflation rate during this recent time span.
That is known as -high- inflation and is certainly not reflected in the ‘official’ inflation numbers coming out of Washington.
We are on the cusp of -hyperinflation-. What is the definition of hyperinflation?:
…’Hyperinflation is a term that describes and measures rapid, excessive, and out-of-control general price increases that result in extreme inflation. Inflation measures the pace of rising prices for goods and services in an economy. Hyperinflation indicates uncontrollable price increases over a defined period, typically measuring more than 50% per month.’…(Investopedia)
Will this situation abate or get worse? My money is on worse. How about if we add in the possibility of a looming strike by the Longshoremen (East and West Coast) on September 30th?
…’The looming threat of a strike at all Atlantic and Gulf Coast ports is becoming more imminent, according to Harold J. Daggett, President of the International Longshoremen’s Association (ILA). With the current contract set to expire in just 80 days on September 30, 2024, the pressure is mounting on employers represented by the United States Maritime Alliance (USMX) to negotiate a new contract and avoid a coastwide strike on October 1.’…(SupplyChain247)
So we already are in a state of -high- inflation regarding the importing of goods into the U.S. If the professionals who are in charge of a lot of the logistics and the discharging goods from the ships are on strike in just a little over 30 days from now, how is any kid going to get an imported GI Joe with the Kung Fu grip? How are you going to get a cheap Android device or any other new electronic product? How much of our food is coming in on those ships?
FDA Imports places the percentage of food imported to the U.S. as a proportion of overall American consumption at 20%.
So not only are we facing even higher inflation as Jay Powell says ‘"The time has come for policy to adjust," (to fan the flames of an inflationary spiral IMHO), but we will no longer have choice of products to buy and perhaps even no availability of any imported products to even consider.
All this as we hurtle towards World War III.
Now is the time for us all (IMHO) to have food, water (and a way to collect, store and purify it), shelter, energy (like a solar generator), protection and communications.
When a top strategist at a major brokerage firm doesn’t IMHO, give it to you straight, then the public IMHO is not being led straight down the road but into the ditch. Don’t trust what anyone says. Check things out for yourself.
Winter is coming. If everything came to a standstill could you make it through the winter to next Spring? What will be the purchasing power of your money next Spring? Do you even have seeds to plant next Spring?
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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice.
