Shipping Prices Will Go Through The Roof As Supply Chains Face Worst Threats Since 2020! - Epic Economist
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Supply chain disruptions. Congested ports. Delivery delays. Soaring shipping prices. All of this seemed like a distant memory from the peak of the COVID-19 pandemic, but it’s happening again, and conditions are far scarier this time around.
The head of ocean freight of the Americas at Rhenus Logistics, Stephanie Loomis, who spends her days negotiating with international carriers on behalf of clients moving products and parts around the globe, revealed during an interview with the outlet that she’s seeing cargo prices skyrocket due to a series of disturbances at world’s busiest shipping routes.
Since the end of 2023, Houthi rebels have been firing on ships entering the Red Sea and heading to the Suez Canal, an essential artery for vessels travelling between Asia, Europe, and the East Coast of the United States. The offensive has escalated in recent months, forcing shipping companies to rethink their routes. They are now opting to take the longer routes around Africa, but that means their journeys are being extended by up to two days.
Additionally, a severe drought in Central America is reducing water levels in the Panama Canal, prompting authorities to restrict the number of ships passing through this key channel for global trade.
On top of all that strain, U.S. dockworkers on the East and Gulf coasts are threatening to go on a strike, while longshore workers at German ports have stopped shifts to demand better pay. Meanwhile, rail workers in Canada are poised to walk off their jobs, jeopardizing cargo movement across North America and risking backups at major ports like Vancouver, British Columbia.
The increasing turmoil in shipping is causing carriers to sharply raise rates, and it is increasing the possibility of a waterborne gridlock, which could once again leave big retail chains facing widespread shortages during the peak of the shopping season. This disruption could also worsen inflation, a major economic concern influencing the US presidential election.
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