Global supply chains imploding

The cost of shipping a container on popular trading routes like the one between China and Europe has soared 840%, with the cost of containers from China to the US jumping from $US1,500 to $US25,000.

In Australia, shipping companies are charging $8,000 per container for shipping to Australia, against $1,370 a year ago.

As one industry forum said “shippers are facing a “meltdown” with rates in the stratosphere, slots up for auction and service performance in the trash”.

“What none of the industry metrics show are the huge numbers of shipments not being moved – boxes left on the quay, stacked in the terminal or stockpiled in export warehouses awaiting a slot”.

Last month, the carrier ONE announced a string of port omissions for Sydney, Brisbane and Melbourne, citing the need for schedule recovery, and costly port delays. Australian meat exporters are reporting 10 day delays to secure containers for their shipments. Australian grain farmers are even worse off, with many failing to meet contractual obligations, due to schedules being regularly cancelled by shipping lines.

According to the F&TA, “three of our members collectively paid in excess of $US117,000 in contract breaches in the past three months alone … because low-paying cargo, such as grain, is getting bumped-off vessels at transhipment ports for higher-paying priority cargo”.

There is no incentive for the shipping carriers to move grain which could lead to bottlenecks next harvest, with farmers potentially having no way to unload grain. The flow-on effect means Australian retailers are waiting months for stock to arrive.

Key stock is down more than 40%, and what they can get, is costing them an absolute fortune in shipping rates. All these extra costs are being passed down the line with the price of food, clothing, shoes, toys and computers all rising steadily. Things are much worse across Europe and the US, with widespread reports of rampant inflation, empty store shelves and crippling fuel and food shortages.

Many ‘experts’, however, seem almost gleeful at this wholesale destruction of the world’s supply chain. Instead of reassuring the public they will fix it, they are saying empty shop shelves and shortages are now “permanent” – all part of the ‘New Normal’.

The Food and Drink Federation boss told a UK industry event last week, that the days of people being able to “find any product they want on the shelves” are gone. “That’s over. And I don’t think it’s coming back”. From now on, he said, people must simply learn to ‘prioritise’ – ‘rationing’?

Our broken supply chains are starting to sound more and more like a ‘managed demolition’ by our self-appointed ‘chosen ones’, as they frogmarch humanity down the ‘Great Reset’ Road to a greener, more sustainable future.