Looking at post-Covid prospects and how they might unfold for logistics and world shipping
 Abundance marked the beginning of the Irish potato famine that killed a million and sent millions more overseas as refugees in the 1840s. The potato blight putrefied some of the potatoes, and rushed the rest off to market the moment they were ready to sell.
So the signal of a famine to come may well be misdisagnosed as a good fortune given the abundant big profits, runaway stock markets and unbridled government spending.
Adding to this ill-founded sense of wellbeing are fanatical fixations on things that do not matter, from global warming, decarbonization, racial and gender justice, insisting that boys can declare themselves to be girls (and vice versa) and a complete over reaction to a flu bug.
All this happening at a time when things have never been so good, almost without exception in entire population, not just in the affluent west, but even in the poorest parts of the world.
Meanwhile western governments are spending trillions of ever-devaluing dollars, betting that enough value will hold to buy enough votes to win the next election.
But what goes up must come down, as it did in Weimar Germany 100 years ago. A practice only saved by external drastic revisions to the reparations bill and incoming Nazi discipline in the '30s. Which is an outcome few of us desire, but may be tempted to support out of sheer desperation.
If one couples these factors with the West's current decoupling from China's economy as the People's Republic's success is increasing achieved by techniques favoured by the Third Reich, it is easy to see the world economy might come down like a house of cards.
Given present condition, one must face the possibility of painful readjustment. Not all of it is bad. Elements of what's wrong today can be re-fashioned and redeployed with profit. Telecommuting, for example, has given a serious practical boost by the Covid crisis.
As workers go to work in cities to prepare, transmit and receive written and verbal information, suburban travel can be drastically reduced as the need office space will fall and telecommuting multi-screen consoles can be made affordable items as commonplace as microwaves and fridges are today.
Over time portions of downtown office space can be converted to housing, effecting a form of urban implosion, which will put more within walking distance or within range of moving sidewalks and interconnecting escalators. And that is just the beginning of the good stuff.
But what of the bad stuff? What if relations between China and the West take a nasty turn? What if war breaks out? Or what happens if a cold war breaks out, which at this stage, seems more likely?
While the latter seems more likely than the former, one can turn into the other if one side bullies its way to world hegemony and is resisted by the other?
While there is every reason why Xi Jinping should be deposed, as he took over a China that was making its way towards civilised behaviour, and turned it into an aggressive threatening state as Adolf Hitler and Joseph Stalin did the same in much the same way.
As cold war seems more likely as it morphs its way from a gentle decoupling of Western economies through re-shoring or home-shoring. This will involve bolstering Japan, which is more or less rearmed already and getting India in reasonable shape, which it has been doing in fits and starts on its own.
Less exciting, but perhaps more important, is the increasing likelihood, that the current social upward mobililty, boosted by soaring rates, and still positive economic numbers the world is enjoying today will come to an end by the end of the year.
The cause of supply chain disruption can be rooted to the Covid crisis, which is mostly man-made. But it was not Covid, or Wuhan flu, that has caused prices to soar, but mankind's panicked reaction - or should one say womankind's. One says womankind because women are more easily frightened than men in far fewer of them undertake dangerous pursuits. And women have been greatly empowered in the last 20 years. Whatever frightens them is to be feared by all - where such fears or justified or not.
In shipping, there is a natural build-up in traffic starting in May for back-to-school August sales, then comes a brief pause before another build-up starting in October before Christmas. This brings about another pause before a brief but then comes a strong flare-up for Golden Week, Chinese New Year, which occasions massive factory output in China around the moveable feast in late January or early February. After which begin the annual slack season in earnest.
For two years, this historic pattern has been altered by Covid. First by panic that ports would close down, which resulted in extraordinary amounts being shipped to get everything through before authorities closed ports - which they never did.
Various lockdowns and curfews prevented the usual massive spending at bars and restaurants in the West. After a financial drought in the service sector, there was a sudden and prolonged money monsoon for goods purchased through ecommerce portals. This, of course, encouraged more ships to ship more stuff.
Wedded to these traditional shipping seasons, the ports were incapable coping with the increased load, which had already been a problem pre-Covid. Post-Covid, the problem became intolerable. Seventy ships were piling up at anchorage outside Los Angeles-Long Beach waiting for berths. Mile-long truck queues formed to pick up that one container they were paid to fetch and would not be paid until it arrived.
It was all very well for President Joe Biden to say ports should put themselves on a 24/7 basis. He didn't have to pay the longshoremen double and triple pay working at night, holidays and weekends. Even on day shifts, the lowest among them were earning six figure wages for day shifts.
Part of the problem was having the longshore unions with a stranglehold on waterfront work. Shipping companies had permitted Dockers - unskilled and semi-skilled labor - to win astronomical wages in exchange for a reduction in their numbers. Now these two factors worked against relieving clogged supply chains. There were not enough of them to do the work, and to hire more at those wages would have been prohibitively expensive and undoubtedly accompanied by union demands that they been taken on permanently.
Add to that the ships were dumping 5,000 containers each on the docks. The speed of cargo handling, once the pride of the industry, was now creating serious problems as one ship after another dumped cargo to be sorted on the docks.
Railyards were little better sharing much the same problems. Like pythons having devoured deer after deer, double stacked trains snaked across the land, laboriously dumping hundreds of containers here and there to be picked up by hundreds of snarling truckers.
Taken together, these factors made it difficult for shippers to find space on ships, which drove freight rates into the stratosphere, having gone up five times of what they were two years ago.
Because this state of affairs has gone on so long, it is natural to think that is likely to continue. But is this a realistic? Eventually it will dawn on every one that Covid mostly kills the very sick and the very old - people one expects to die in the near future. Women will eventually accept that one cannot protect oneself, even one's loved ones, from the inevitable disease from which we call suffer called terminal life.
Things will return to normal shipping patterns. What is likely is that they will return in weakened as they will be serving a weakened western economy less able to buy the goods it once did and will tend to spend on nights out at bars and restaurants, and less on goods shipped as the seasonal patterns return to shipping which may well be much reduced in volume. |
