As the supply chain collapses, shipping lines post record profits

You can file this phenomenon under “the rich get richer, and the poor get poorer” in financial crises. Amazon, Walmart, and other retailers with massive online presences would have loved for the coronavirus lockdowns to carry on indefinitely – sure, millions of Americans were thrown into poverty, but they were rolling in the dough, and state and local governments were arbitrarily forcing their competition permanently out of business. There is a lot of money to be made in dysfunction, and one can imagine they were lobbying politicians like crazy to keep it going.

Turns out, the same is true for shipping lines right now, as China’s energy and manufacturing sectors are broken and containers pile up at US ports with no one to unload them.

From Loadstar, a supply chain industry rag – Booming Revenues Swell Evergreen H1 Profit Nearly 30 Times and CMA CGN Posts Record $3.5 Billion Profit for Q2 – And Promises More to Come.

And A.P. Moller – Maersk Reports Record Earnings and Continued Growth Momentum in Logistics in Q2.

Future historians are going to look back on this period of groupthink, the scale of totally unnecessary humanitarian crises that stemmed from objectively bad public policy, and the politically connected people that made bank, and judge our current, corrupt government cruelly.

I, for one, am making sure our household is stocked up on essentials going into the colder months. Not just food, but anything our household cannot function without. I am telling all my friends and family to do the same. I am telling you, friends from the electronic void, to do the same.

This situation is not like 2020 where the supply chain was battling coronavirus-panicked hoarders who thought they needed a million rolls of toilet paper in their garage. We went into the 2020 crisis with a booming economy, fully stocked warehouses, full employment, and a generally well-functioning supply chain. It could and did handle serious disruption elegantly, all things considered.

With what’s happening in China right now, everything is getting delayed dramatically after already being delayed months and months. My friends who work in logistics spent last week in emergency meetings.

If people start seeing empty shelves in stores and it triggers the hoarding instinct once more, there’s not going to be a back-end operation to replenish those goods. This may very well be the real motherfucking deal. And if it’s not, well, you are just pulling your spending on essentials forward.

There is no good way to deal with hyperinflation, should that arrive. But one can prepare for shortages.

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