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I've never seen anything like this: the epidemic disrupts the global freight industry
Announcer: Release Time:2021-04-09


More than 20 container ships full of fitness bikes, electronics and other popular imports have been parked for up to two weeks off the coast of Los Angeles.

In Kansas City, farmers are trying to get soybeans to Asian buyers. In China, furniture ready for shipment to North America is piled on the ground of the factory.

Worldwide, the new crown virus pandemic has brought about a very serious impact on trade, which leads to the rising cost of goods transportation and new challenges to the global economic recovery. The new crown virus has disrupted the careful operation of goods from one continent to another.

At the center of the storm is the shipping container which has made great efforts for globalization.

The Americans trapped at home have boosted orders for Chinese factory products, mostly in containers - metal containers neatly placed on the deck of giant cargo ships - to the other side of the Pacific. With the increase of office furniture in the bedroom of American families and the installation of treadmills in basement, the demand for shipping has exceeded the number of available containers in Asia, which leads to the shortage of containers in Asia and the accumulation of American ports.

The containers that shipped millions of masks to African and South American countries at the beginning of the outbreak are still empty and no one has taken them back, as shipping companies have concentrated their cargo ships on the most tight routes linking North America and Europe to Asia.

In ports where ships call, ships loaded with cargo waiting for unloading are often trapped in water and wait for days to enter. The pandemic and related restrictions have reduced the number of dock workers and truck drivers, leading to delays in cargo handling from Southern California to Singapore. One place is waiting for unloading containers, and other places need to be used for loading.

"I've never seen this," said Lars mikaeljensen, head of global maritime network at a. P. Moller Maersk, the world's largest shipping company. "All the links in the supply chain are full of load. Ships, trucks, warehouses. "

Economies around the world are trying to mitigate the chain reaction from disruption to maritime transport. The increase in the cost of trans Pacific Transportation of us grain and soybean could lead to higher food prices in Asia.

Ports in Australia and New Zealand are filled with empty containers; the scarcity of containers in the port of Calcutta in India forces commercial trucks for electronic parts manufacturers to transport goods to Mumbai, more than 1600 km west, where there is a relatively adequate supply of containers.

Rice exporters in Thailand, Vietnam and Cambodia are abandoning some of their exports to North America because containers are not found.

There is evidence that the sea transportation disorder has brought great profits to shipping companies such as maersky. The company's pre tax profit for the last three months of 2020, announced in February, exceeded $2.7 billion due to record freight prices.

No one knows how long the disorder will last. Some experts believe that with container factories, almost all in China, stepping up production to meet demand, the problem of container shortages will not be alleviated until the end of the year.

Since its first use in 1956, containers have changed trade completely. Containers load the goods into standard size containers and then be lifted by cranes to flat train cars or trucks - reducing the distance around the world.

South Korea made flat panel displays are shipped to China's factories that assemble smartphones and laptops, and then deliver the finished products across the Pacific to the United States, all in containers.

Any step of the problem means delays and additional costs to one party. The epidemic has disrupted all aspects of the supply chain.

"Everyone wants anything," said Akhil Nair, vice president of global carrier management at Seko Logistics Hong Kong headquarters. "Infrastructure can't keep up with it."

There are so many ships waiting to unload outside the port of Los Angeles that all anchor points are occupied.  COLEY BROWN FOR THE NEW YORK TIMES

This is how disorder starts

More than a decade ago, the business of shipping companies was hit hard during the global financial crisis.

A mysterious virus appeared in China early last year, forcing the government to shut down factories to curb the spread of the virus. The shipping industry is preparing for another hit. Carriers cut back on business and idle many ships.

However, as carriers cut down their business, orders for medical masks and protective clothing and other protective equipment needed by first-line medical staff have increased significantly, many of which are made in China. Chinese factories have grown rapidly, and container ships ship their products to all over the world.

The need for personal protective equipment such as masks and gloves means that containers filled with these items are transported to ports far away from the main trade routes. AGENCE FRANCE-PRESSE — GETTY IMAGES

After the financial crisis, it took many years for the global economy to recover. Unlike the last crisis, Chinese factories have been booming in the second half of 2020, leading to a surge in demand for shipping.

As shipping companies put every ship in use, they focus on the most demanding routes - especially from China to North America.

As Americans adjust their spending, the pressure on shipping is getting bigger and higher. They can't go on holiday or restaurants. Americans spend their money on video game machines and pastry mixers. They put the equipment needed for remote work and learning to their homes.

According to seaintelligence, a Copenhagen based research firm, sports equipment shipped from Asia to North America in containers from September to November more than doubled from the same period last year. The freight volume of gas stoves, electric furnaces and cooking equipment almost doubled in the same period. The transport of disinfectant increased by more than 6800%.

"All of these growing demand is basically caused by pandemics," said Alan Murphy, founder of the research company.

Overall, Global trade in 2020 is down only 1 per cent compared with the previous year. But this does not reflect the progress of Global trade in 2020: a 12 per cent decline in April and may, and then, equally significant growth. The shipping industry is unable to adapt to this big rise and fall, which leads to containers leaving unnecessary places and pushing shipping prices to an amazing level.

Peter Baum's New York company Baum Essex uses factories in China and Southeast Asia to produce umbrellas for Costco, cotton bags for Walmart and porcelain for bed bath & beyond. Six months ago, he could have shipped a 40 foot container to California for $2500.

"We just spent between $6000 and $7000," he said. "This is the highest freight I've seen in 45 years of working in this industry."

In early September, he waited 90 days to find a cargo space on a ship for a container with wicker tables and chairs.

Another U.S. importer, high united, imports women's shoes from China and Hong Kong, such as ash and Isaac Mizrahi, which is paying more than five times the normal price for shipping.

"It's a classic supply and demand issue," said Kim Bradley, chief operating officer of the company. The company is headquartered in daidem, Massachusetts.

Kim Bradley, chief operating officer of highline united, is in his office in daidem, Massachusetts. The company that makes women's shoes in China pays a lot more for transportation than it used to.  SIMON SIMARD FOR THE NEW YORK TIMES

The impeccable port of California caused traffic jams at sea

In Los Angeles and nearby Long Beach, some quaymen and truck drivers are infected with the virus, others are isolated from infected people, resulting in a shortage of manpower and slow unloading.

"The backlog is expected to continue until mid summer," gene seroka, port director of Los Angeles, said at a recent board meeting.

Cargo ships outside the port of Los Angeles have occupied the available anchor points and have to use the so-called drift zone, the waters that allow the vessel to float freely, similar to the airspace used by hovering over busy airports waiting for landing aircraft.

Major consumer brands - from under armour, a sportswear manufacturer to Hasbro, a game and toy maker - have been dealing with the transport bottlenecks.

Pelton blamed port congestion for one of the reasons for the delay in delivery of its high-end indoor bicycles. To reduce delivery waiting time, peloton outlined a $100 million investment in air and accelerated shipping.

Even under normal circumstances, the cost of air transport is about eight times that of sea transportation. Most of the air cargo is carried in the cargo hold of the airliner. Due to the great restrictions on air travel, the available cargo tanks are greatly reduced.

Three large cranes arrived in Oakland, California earlier this year to help unload the largest cargo ships at the port.  JIM WILSON/THE NEW YORK TIMES

Some freight companies have rescheduled their flights, stopping in Oakland, California, more than 600 kilometers north of Los Angeles, and then to Los Angeles. But containers are placed on board the ship according to the destination. The sudden change in the course means moving containers around like building blocks.

No one knows how this chaos ends

In recent weeks, shipping companies have been making great efforts to transport empty containers to Asia, increasing the available number, according to container xchange, a German Hamburg consultancy.

Some experts believe that as the number of vaccinations increases and life returns to normal, Americans will again change their way of consumption, moving from buying goods to experiencing life, which will reduce the demand for containers.

But even if that happens, retailers will begin to hoard inventory for the year-end holiday shopping spree.

The stimulus bill that Congress is discussing could bring more jobs, and a wave of consumer spending, as people who have lost their jobs will have the money to replace old home appliances and buy new clothes.

"There may be a large number of consumers in the United States that were previously unable to consume," said Michael Brown, container analyst at KBW in New York. "For a long time, there are still some problems with container shortages."

Los Angeles port is the main port for Asian goods to enter the United States. During the popular period, there is a serious shortage of manpower.  COLEY BROWN FOR THE NEW YORK TIMES

More than 20 container ships full of fitness bikes, electronics and other popular imports have been parked for up to two weeks off the coast of Los Angeles.

In Kansas City, farmers are trying to get soybeans to Asian buyers. In China, furniture ready for shipment to North America is piled on the ground of the factory.

Worldwide, the new crown virus pandemic has brought about a very serious impact on trade, which leads to the rising cost of goods transportation and new challenges to the global economic recovery. The new crown virus has disrupted the careful operation of goods from one continent to another.

At the center of the storm is the shipping container which has made great efforts for globalization.

The Americans trapped at home have boosted orders for Chinese factory products, mostly in containers - metal containers neatly placed on the deck of giant cargo ships - to the other side of the Pacific. With the increase of office furniture in the bedroom of American families and the installation of treadmills in basement, the demand for shipping has exceeded the number of available containers in Asia, which leads to the shortage of containers in Asia and the accumulation of American ports.

The containers that shipped millions of masks to African and South American countries at the beginning of the outbreak are still empty and no one has taken them back, as shipping companies have concentrated their cargo ships on the most tight routes linking North America and Europe to Asia.

In ports where ships call, ships loaded with cargo waiting for unloading are often trapped in water and wait for days to enter. The pandemic and related restrictions have reduced the number of dock workers and truck drivers, leading to delays in cargo handling from Southern California to Singapore. One place is waiting for unloading containers, and other places need to be used for loading.

"I've never seen this," said Lars mikaeljensen, head of global maritime network at a. P. Moller Maersk, the world's largest shipping company. "All the links in the supply chain are full of load. Ships, trucks, warehouses. "

Economies around the world are trying to mitigate the chain reaction from disruption to maritime transport. The increase in the cost of trans Pacific Transportation of us grain and soybean could lead to higher food prices in Asia.

Ports in Australia and New Zealand are filled with empty containers; the scarcity of containers in the port of Calcutta in India forces commercial trucks for electronic parts manufacturers to transport goods to Mumbai, more than 1600 km west, where there is a relatively adequate supply of containers.

Rice exporters in Thailand, Vietnam and Cambodia are abandoning some of their exports to North America because containers are not found.

There is evidence that the sea transportation disorder has brought great profits to shipping companies such as maersky. The company's pre tax profit for the last three months of 2020, announced in February, exceeded $2.7 billion due to record freight prices.

No one knows how long the disorder will last. Some experts believe that with container factories, almost all in China, stepping up production to meet demand, the problem of container shortages will not be alleviated until the end of the year.

Since its first use in 1956, containers have changed trade completely. Containers load the goods into standard size containers and then be lifted by cranes to flat train cars or trucks - reducing the distance around the world.

South Korea made flat panel displays are shipped to China's factories that assemble smartphones and laptops, and then deliver the finished products across the Pacific to the United States, all in containers.

Any step of the problem means delays and additional costs to one party. The epidemic has disrupted all aspects of the supply chain.

"Everyone wants anything," said Akhil Nair, vice president of global carrier management at Seko Logistics Hong Kong headquarters. "Infrastructure can't keep up with it."

There are so many ships waiting to unload outside the port of Los Angeles that all anchor points are occupied.  

This is how disorder starts

More than a decade ago, the business of shipping companies was hit hard during the global financial crisis.

A mysterious virus appeared in China early last year, forcing the government to shut down factories to curb the spread of the virus. The shipping industry is preparing for another hit. Carriers cut back on business and idle many ships.

However, as carriers cut down their business, orders for medical masks and protective clothing and other protective equipment needed by first-line medical staff have increased significantly, many of which are made in China.


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