ENCOURAGING ANGELS: Shipping Container and Ocean Delivery Crisis on Our Doorstep-This Means Hyperinflation and Sharply Increased Lack of Availability of Imported Goods

Photo Credit: supplychain247

By Stan Szymanski

Just last week Liz Ann Saunders, Chief Investment Strategist at Charles Schwab and Co. Inc. reported the following on LinkedIn:

…’Per data from National Retail Federation and Hacket Associates, U.S. container imports through major ports will reach 24.9 million measured in 20-foot equivalent units … up 12% from last year and close to 2021/2022 levels’…

Sounds like a positive economic indicator…on the surface…Time to dig a little deeper…

…’CONTAINER RATES spiked months ago as shipping firms had to redirect traffic around the Horn of Africa due to MidE (Mid-East) situation. Costs passed on to consumers (who else). Inflationary. ‘…(Brian Byrne-Investment Committee Member at Assembler Growth Capital, LLC)

The question I posed to Ms. Saunders (and commented to Brian) was to basically say: Why is Saunders quoting rates on -20 foot- shipping containers? Anytime you look at a ocean ship transporting containers (like the above pic)-The shipping containers you see is only made up of a minority of the 20 foot containers-It is the bigger, standard -40 foot-shipping containers that rule the oceans.

…and the costs for those 40 footers has soared:

…’Container freight rates oscillated dramatically between January 2023 and August 2024. Freight rates slumped to their lowest level on the 26th of October 2023, when the going rate for a 40-foot container was only 1,342 U.S. dollars. Since then, the global freight rate has significantly increased, hitting over 5,900 U.S. dollars in July 2024, the highest value on record’…(Statista.com)

As Mr. Byrne stated, this is inflationary. Quite inflationary.

With rates for the 40 foot containers going from $1,342 in October 2023 to $5,900 in July of 2024 this represents an increase in the cost of importing goods from overseas (the US imports the most goods in world commerce) of over 400% during the aforementioned 20 month period.

Why didn’t Ms. Saunders report on what was going on with the 40 foot shipping containers? Perhaps Ms. Saunders was looking for one good piece of news to report on in a sea of inflationary statistics. Perhaps it would have been more forthright to have reported the obvious.

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A rudimentary calculation places the cost of importing goods into the U.S. increasing at a 20% per month inflation rate during this recent time span.

That is known as -high- inflation and is certainly not reflected in the ‘official’ inflation numbers coming out of Washington.

We are on the cusp of -hyperinflation-. What is the definition of hyperinflation?:

…’Hyperinflation is a term that describes and measures rapid, excessive, and out-of-control general price increases that result in extreme inflation. Inflation measures the pace of rising prices for goods and services in an economy. Hyperinflation indicates uncontrollable price increases over a defined period, typically measuring more than 50% per month.’…(Investopedia)

Will this situation abate or get worse? My money is on worse. How about if we add in the possibility of a looming strike by the Longshoremen (East and West Coast) on September 30th?

…’The looming threat of a strike at all Atlantic and Gulf Coast ports is becoming more imminent, according to