China Ports Lose Millions

A story about how COVID-related port delays in China are causing massive shipping disruptions and financial losses.

"There's a situation where the biggest port in China is backed up because there was a COVID outbreak. They were operating at 30% capacity for a week, and this is the biggest throughput logistics place in the world. The knock-on effects will last months.

I tweeted at Ryan Peterson asking about the cost per day of boats sitting idle with cargo, just waiting in the water not being unloaded. He did the math - it's about $1 million a day that the shipping company is losing just by being stuck.

One round trip from Asia on these shipping boats generates $50 million in profit on a 30-day trip. The top ten shipping companies will make about $100 billion in profit this year, but in the last 10 years they've lost $100 billion - it's an extremely volatile space based on volumes and costs.

Right now we're shipping containers at twice the cost of last year just because supply and demand is so out of whack. And for all the downstream people - if their goods are stuck on these boats, they're delayed, out of inventory, and losing sales. There's just one knock-on effect after another."