By Tyler Durden | July 31, 2021
Not every day does a large cargo vessel get booted from U.S. waters after the discovery of invasive insects from China.
According to marine news website gCaptain, a Panama-flagged bulk carrier called M/V Pan Jasmine was anchored downriver from New Orleans on July 17 when the U.S. Customs and Border Protection (CBP) discovered five different pests, including two species (namely Cerambycidae, a type of beetle, and Myrmicinae, colonizing queen ants) that are known to pose a significant agriculture threats to U.S. farmland.
The significant presence of pests onboard the vessel forced CBP to expel it from U.S. waters.
New Orleans Area Port Director Terri Edwards said if the vessel offloaded with dunnage filled with pests, "it would have been put in a Louisiana landfill where the insects could crawl out and invade the local habitat, causing incalculable damage."
Edwards said, "inspecting wood dunnage of otherwise lawful shipments is one of the many, lesser-known ways Office of Field Operations Agriculture Specialists help keep our country safe. I am proud of our agriculture specialists and the USDA personnel for recognizing these dangerous pests."
Cerambycids are native to China and the Korean peninsula and were accidentally imported to the U.S. over the decades in shipping material that has led to the destruction of trees and farmland.
The USDA Forest Service has spent more than a half-billion dollars to eradicate cerambycids between 1996 and 2013.
There was no word if the insects were deliberately put on the ship as a form of "bug warfare," as for thousands of years, military leaders have used insects as weapons of war.
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By F. William Engdahl
Global Shipping Crisis Far Worse Than Imagined
By F. William Engdahl | 21 July 2021
Image: Attribution: Photo by Bernard Spragg. CMA CGM QUARTZ Container Ship. Licensed under Public Domain. https://www.flickr.com/photos/volvob12b/42320149395
Over the past decades world ocean trade has expanded almost exponentially as major manufacturing outsourcing from USA and European corporations has blossomed under the advent of economic globalization. The result has been that Asia, most especially China, has become the essential manufacturing source for everything from iPhones to antibiotics and everything in-between. The creation of the World Trade Organization to impose new rules on the trade has been a key driver. It has also made global supply chains for delivering goods more fragile than ever in history. The rise in cost of ocean container shipping indicates the growing crisis. Compounding the growing crisis are enormous labor shortages owing to global COVID measures."
According to German-based Statista Research Department, some 80 percent of all goods globally are carried by sea including oil, coal, grains. Of that total, in terms of value, global maritime container trade accounts for some 60 percent of all seaborne trade, valued at around 14 trillion US dollars in 2019. This ocean shipping has become the arteries of the world economy for better or worse.
This is a direct consequence of the 1990’s creation of the WTO with new rules favoring out-sourcing of manufacture to countries where production was far cheaper, that is as long as ocean transport was cheap. After China became a WTO member in 2001, they became the greatest beneficiary of the new rules and within a decade China was called the "workshop of the world." Entire industries such as electronics, pharmaceuticals, textiles, chemicals as well as plastics were transferred to China with then the world's lowest wages, for factory assembly. It worked because the cost of shipping to Western markets was comparatively low.
As the economic output of China grew, China became a world shipping giant, shipping their goods cheaply to places such as Long Beach or Los Angeles, California in the US or Rotterdam in Europe. The Walmart retail giant was destination for a huge share of the China goods with as much as 80% of its products of China origin. This is not small beer as they say in Texas. Walmart is the world's largest company by revenue, with annual sales of $549 billion. Today as a result of this globalization, China has 8 of the world's 17 largest ports in terms of shipping volumes to handle its exports.
The China shipping expansion combined with that from Japan and South Korea to make up the major ocean container shipping traffic worldwide. That vital economic flow is now under unprecedented stress, which could soon have catastrophic global economic consequences for the world goods supply chains.
When what was termed by WHO as a novel coronavirus, first appearing in Wuhan, was declared by WHO as a global pandemic in March 2020, the impact on world trade was immediate and huge as countries locked down their economies, something unprecedented in peacetime. Orders for products from China and other Asian producers were frozen by Western buyers. Container ships were cancelled everywhere in 2020. Then as US and EU governments released trillions of dollars in unprecedented stimulus, demand for containers from Asia to the West in relative terms exploded, compared with supply, as people began using stimulus, especially in the US to buy online, most of which was “made in China."
That has had a serious disruptive impact on what was once a minor cost—ocean container shipping. Modern container ports, especially those in China, are state-of-the-art, computer automated operations loading thousands of containers daily via automated cranes. At destination ports such as Long Beach or Hamburg the containers are then off-loaded to trucks or train and brought to their destination cities before being returned to the port for return shipping. It is this intricate supply chain that is now in crisis.
In 2019 before the pandemic crisis, the cost of shipping a 40-foot-long container from China to Europe by sea cost between USD 800-2,500. For the bulk of products such as textiles, pharmaceuticals or smart phones, ocean containers were clearly the best low-cost option for Asia-Europe trade despite rail possibilities. For Asia-North America trade it was almost the only option, as air was a costly alternative. Today with a corona-linked 50% reduction in air travel, container ships are virtually the only long-distance option.
Now port-to-port spot rates, for example from Shanghai, China's largest container port, to Los Angeles, have exploded from around $1,500 per 40-foot container just before the WHO Pandemic in early 2020, to $4,000 in September 2020, and to $9,631 in the week ended July 8, 2021, according to Drewry Supply Chain Advisors. This is an increase of over 600% from early 2020, pre-pandemic. And this is just one source of the global inflation we now see erupting.
This is not the worst. According to Drewry, "We have heard reports of $15,000 from China to the West Coast and are aware that carriers are charging additional premiums on top to prioritize the loading of a late booking ahead of normal FAK [Freight All Kinds] rate cargoes." From $1,500 to $15,000 in two years is a rise of tenfold. And rates from Shanghai to Rotterdam have also skyrocketed from below $2,000 in early 2020, to over $12,000 in July, or 600%.
To cite one product that experienced panic buying at the start of the Pandemic, China is the world leader in exports of toilet paper with 11% of global supply. A 600% rise in ocean freight cost makes it inevitable that the price of something as ordinary as toilet paper is slated to rise significantly or become in short supply in key places globally. When such pressures are coming all across the product line, ocean container rates become a significant driver of general inflation.
In early 2020 as nations around the world went into unprecedented panic lockdowns over coronavirus fears, global shipping froze. Factories everywhere were closed. Later in 2020 the flows slowly resumed as China opened up. As it became clear in later 2020 that the various huge government economic stimulus money would spark a recovery in demand for Asian goods, especially demand via e-commerce platforms like Amazon, a dramatic shortage in available containers developed. In the USA alone a combined $9 trillion in total fiscal and monetary stimulus has been released since early 2020. That is world historic.
World trade flows can be compared with the human body's blood circulation system. When bottlenecks develop with port congestion, or say Suez Canal blockage, it is similar to blood clots to the human circulation system. The March 2021 blockage in the Suez Canal of the giant container ship, Ever Given, from Taiwan's Evergreen Co. stopped ship traffic for almost a week in one of the world's major waterways between China and Europe, causing bottlenecks to container deliveries not yet completely resolved. Then in China new testings for corona in the large container port of Yantian – part of the world's 4th largest container port Shenzhen– caused added major disruptions of shipping, further aggravating rate rises. Those disruptions are likely to continue.
Please go to F. William Engdahl's website to continue reading.
By F. William Engdahl
By F. William Engdahl | 21 July 2021
Image: Attribution: Photo by Bernard Spragg. CMA CGM QUARTZ Container Ship. Licensed under Public Domain. https://www.flickr.com/photos/volvob12b/42320149395
Over the past decades world ocean trade has expanded almost exponentially as major manufacturing outsourcing from USA and European corporations has blossomed under the advent of economic globalization. The result has been that Asia, most especially China, has become the essential manufacturing source for everything from iPhones to antibiotics and everything in-between. The creation of the World Trade Organization to impose new rules on the trade has been a key driver. It has also made global supply chains for delivering goods more fragile than ever in history. The rise in cost of ocean container shipping indicates the growing crisis. Compounding the growing crisis are enormous labor shortages owing to global COVID measures."
Origins of the Crisis
According to German-based Statista Research Department, some 80 percent of all goods globally are carried by sea including oil, coal, grains. Of that total, in terms of value, global maritime container trade accounts for some 60 percent of all seaborne trade, valued at around 14 trillion US dollars in 2019. This ocean shipping has become the arteries of the world economy for better or worse.
This is a direct consequence of the 1990’s creation of the WTO with new rules favoring out-sourcing of manufacture to countries where production was far cheaper, that is as long as ocean transport was cheap. After China became a WTO member in 2001, they became the greatest beneficiary of the new rules and within a decade China was called the "workshop of the world." Entire industries such as electronics, pharmaceuticals, textiles, chemicals as well as plastics were transferred to China with then the world's lowest wages, for factory assembly. It worked because the cost of shipping to Western markets was comparatively low.
As the economic output of China grew, China became a world shipping giant, shipping their goods cheaply to places such as Long Beach or Los Angeles, California in the US or Rotterdam in Europe. The Walmart retail giant was destination for a huge share of the China goods with as much as 80% of its products of China origin. This is not small beer as they say in Texas. Walmart is the world's largest company by revenue, with annual sales of $549 billion. Today as a result of this globalization, China has 8 of the world's 17 largest ports in terms of shipping volumes to handle its exports.
The China shipping expansion combined with that from Japan and South Korea to make up the major ocean container shipping traffic worldwide. That vital economic flow is now under unprecedented stress, which could soon have catastrophic global economic consequences for the world goods supply chains.
When what was termed by WHO as a novel coronavirus, first appearing in Wuhan, was declared by WHO as a global pandemic in March 2020, the impact on world trade was immediate and huge as countries locked down their economies, something unprecedented in peacetime. Orders for products from China and other Asian producers were frozen by Western buyers. Container ships were cancelled everywhere in 2020. Then as US and EU governments released trillions of dollars in unprecedented stimulus, demand for containers from Asia to the West in relative terms exploded, compared with supply, as people began using stimulus, especially in the US to buy online, most of which was “made in China."
That has had a serious disruptive impact on what was once a minor cost—ocean container shipping. Modern container ports, especially those in China, are state-of-the-art, computer automated operations loading thousands of containers daily via automated cranes. At destination ports such as Long Beach or Hamburg the containers are then off-loaded to trucks or train and brought to their destination cities before being returned to the port for return shipping. It is this intricate supply chain that is now in crisis.
In 2019 before the pandemic crisis, the cost of shipping a 40-foot-long container from China to Europe by sea cost between USD 800-2,500. For the bulk of products such as textiles, pharmaceuticals or smart phones, ocean containers were clearly the best low-cost option for Asia-Europe trade despite rail possibilities. For Asia-North America trade it was almost the only option, as air was a costly alternative. Today with a corona-linked 50% reduction in air travel, container ships are virtually the only long-distance option.
Now port-to-port spot rates, for example from Shanghai, China's largest container port, to Los Angeles, have exploded from around $1,500 per 40-foot container just before the WHO Pandemic in early 2020, to $4,000 in September 2020, and to $9,631 in the week ended July 8, 2021, according to Drewry Supply Chain Advisors. This is an increase of over 600% from early 2020, pre-pandemic. And this is just one source of the global inflation we now see erupting.
This is not the worst. According to Drewry, "We have heard reports of $15,000 from China to the West Coast and are aware that carriers are charging additional premiums on top to prioritize the loading of a late booking ahead of normal FAK [Freight All Kinds] rate cargoes." From $1,500 to $15,000 in two years is a rise of tenfold. And rates from Shanghai to Rotterdam have also skyrocketed from below $2,000 in early 2020, to over $12,000 in July, or 600%.
To cite one product that experienced panic buying at the start of the Pandemic, China is the world leader in exports of toilet paper with 11% of global supply. A 600% rise in ocean freight cost makes it inevitable that the price of something as ordinary as toilet paper is slated to rise significantly or become in short supply in key places globally. When such pressures are coming all across the product line, ocean container rates become a significant driver of general inflation.
Bottleneck of Containers
In early 2020 as nations around the world went into unprecedented panic lockdowns over coronavirus fears, global shipping froze. Factories everywhere were closed. Later in 2020 the flows slowly resumed as China opened up. As it became clear in later 2020 that the various huge government economic stimulus money would spark a recovery in demand for Asian goods, especially demand via e-commerce platforms like Amazon, a dramatic shortage in available containers developed. In the USA alone a combined $9 trillion in total fiscal and monetary stimulus has been released since early 2020. That is world historic.
World trade flows can be compared with the human body's blood circulation system. When bottlenecks develop with port congestion, or say Suez Canal blockage, it is similar to blood clots to the human circulation system. The March 2021 blockage in the Suez Canal of the giant container ship, Ever Given, from Taiwan's Evergreen Co. stopped ship traffic for almost a week in one of the world's major waterways between China and Europe, causing bottlenecks to container deliveries not yet completely resolved. Then in China new testings for corona in the large container port of Yantian – part of the world's 4th largest container port Shenzhen– caused added major disruptions of shipping, further aggravating rate rises. Those disruptions are likely to continue.
Please go to F. William Engdahl's website to continue reading.
________
Did you order freight shipped in containers? You might end up waiting a very long time for delivery.
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