by Financial Argument via Financial Argument
This supply problem, or the container crisis, is an important reason for the price increases in food products and shortage all-around, which will become more severe in the coming weeks. It can cause food shortages or food crisis.
We have to take this container crisis very seriously. Be prepared for price hikes & shortages all-around. Although ordinary citizens may not be aware of it right now, there is a major container shortage causing sleepless nights for major international traders. For ordinary citizens who remained unprepared and unaware of the situation, the sleepless nights are on the way.
Giant shipping companies, working in conjunction with different governments, played a dirty game in order to increase their profits. But now this game they are playing is about to turn into a complete economic disaster for all of us.
As a result of this great disaster, the days are coming when you will truly feel the impact of the economic crisis on your wallets.
In fact, everything seemed to be going great for the giant shipping companies before last September.
Container shipping by sea was one of the sectors that unexpectedly thrived as a result of the health crisis. Freight shipping rates rose sharply in 2019, and are still rising. Last year, it was estimated that the total net profit in the sector will reach 9 billion dollars, increasing by more than 40% compared to 2019.
I’m referring to giant companies like Maersk, Cosco, MSC, CMA-CGM Group. Maersk, for example, tripled its net profit in the second quarter, with a reduced capacity, lower fuel costs, and higher freight rates.
If we recall the financial crisis of 2008, world trade took a huge hit. It took years to recover. It is worth mentioning that much consolidation took place during that time. For example, the shares of five major transporters increased from 40 percent to 60 percent. Such a rapid recovery in foreign trade was not expected. But as I said, there was an increase contrary to what was expected.
However, the alarm signals started to go off towards mid-October…
Freight prices started to skyrocket in mid-October when the problems in ocean transportation reached extreme levels- the ports slowed down and the container shortage began.
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