Out-of-Control Shipping Costs Fire Up Prices From Coffee to Toys
June 13, 2021, 4:31 AM GMT+5:30
FROM BLOOMBERG.COM NEWS
The skyrocketing price of shipping goods across the globe may hit your pocketbook sooner than you think -- from that cup of coffee you get each morning to the toys you were thinking of buying your kids.
Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping. With upwards of 80% of all goods trade transported by sea, freight-cost surges are threatening to boost the price of everything from toys, furniture and car parts to coffee, sugar and anchovies, compounding concerns in global markets already bracing for accelerating inflation.
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OUR VIEW ON THE ABOVE
Rising crude oil and natural gas price will only raise the shipping cost further. Global hyper inflation chances will only increase due to higher shipping cost. This is here to stay alteast till Christmas.
Inventories of everything is being increased by everyone all across the globe due to (a) Fears that covid might return which will once again add to supply pressures. (b) Post Covid pent up demand will be very high. (c) Every rising cost of metals, soft commodities and everything has also resulted in everyone maintaining multi decade high inventors. (other than perishables).
Investment in gold, silver and physical assets need higher allocation. The returns in these may not match stocks and crypto currencies but they they are the best hedge against soaring prices from a pin to everything.
(Prepared by Chintan Karnani. Views are my own)