From: https://www.zerohedge.com/markets/deep-ship-deep-dive-supply-chain-crisis
In Deep Ship: What's Really Driving The Supply-Chain Crisis
BY TYLER DURDEN
SUNDAY, OCT 03, 2021 - 12:15 PM
By Michael Every and Matteo Iagatti of Rabobank
Summary
- It is impossible to ignore the current shipping crisis and its impact on global supply chains
- A common view is that this is all the result of Covid-19. Yet while Covid has played a key role, it is only part of a far larger interconnected set of problems
- This report examines current shipping market dynamics; overlooked “Too Big to Sail” structural issues; a brewing political tsunami as a backlash; possible Cold War icebergs ahead; and the ‘ship of things to come’ if maritime past is a guide to maritime future
- While central banks and governments both insist inflation is transitory and will fall once supply-chain bottlenecks are resolved, shipping dynamics suggest they are closer to becoming systemically entrenched
- Moreover, both historical and current trends towards addressing such problems suggest potential global market disruptions at least equal to the shocks we have already experienced. Many ports will get caught in this storm, if so
Ready to ship off?
It is impossible to ignore the current shipping crisis and its impact on global supply chains and economies.
Businesses face huge headaches as supply dries up. Consumers see bare shelves and rising prices. Governments have no concrete solutions – save the army? Economists have to discuss the physical economy rather than a model. Central banks still assume this will all resolve itself. And shippers make massive profits.
The giant Ever Given, which blocked the Suez Canal for six days in March 2021, is emblematic of these problems, but they run far deeper. This report will explore the shipping issue coast-to-coast, and past-to-present in six ‘containers’:
1. “Are you shipping [shitting] me?”, a deep-dive into market dynamics and supply-demand causes of soaring shipping prices;
2. “To Big to Sail[Fail]”, a key structural issue driving things;
3. “Tsunami of politics” of [on] the looming backlash to what is happening;
4. “Cold War icebergs” of [on] fat geopolitical tail risks;
5. “Ship [Shape] of things to come?”, asking if the maritime past is a potential guide to maritime future; and
6. “Wait and sea [See]?”, a strategic overview and conclusion.
