Wonder how high Yemen ranks right now as pound for pound most influential country

Thus far we’ve not seen any impact on air freight prices as it’s the post holiday low season without all the e-commerce demand that drove the high air prices in Q4. A 747 cargo plane can only carry around 7 ocean containers worth of cargo though compared to 10,000+ for the mega container ships, so it won’t take a lot of companies deciding to shift cargo from ocean to air for the air cargo market to become capacity constrained.

What a wild difference between the cargo capacity of the two.

When the Yemenis they closed the red sea

A call came on down from the powers that be

To adjust course immediately

Roll on north Umbria

but the boat is a Houthi missile

South Africa could theoretically do some epic trolling rn

It would be cool if South Africa denied them permission to dock if they were bound for Isisrael, so they would be stranded, out of fuel as a form of karma and watch a city twice the size of Gaza - Durban, not be under siege and the dockworkers on the mainland once more relive their historic moments.

If was so good why isn't there a 2?

2:

I work in global logistics and the word just went out last week that container shipping prices have gone up from this.

archive link https://archive.is/VNivK

As god intended

E F F I C I E N C Y

Death to America

Fascinating to me that this all happening as I am reading the first few chapters of volume 2 of Capital. It’s all about the circulation of commodities i.e. what commodities do after they are produced, and then how the money from the sale of those commodities goes back into production. A key point Marx is hitting on in chapters 5 and 6 is that the faster you can circulate commodities, the more surplus value in total is created. So conversely, a slowdown in circulation - like the transportation of commodities taking a whole lot longer to get from A to B - can be a massive reduction of surplus value. Maybe firms aren’t feeling the pain yet but they will soon. Should get interesting.

Ocean freight prices are spiking even on trade lanes that on the surface would not seem to be affected by the diversions like Asia to US west coast lanes.

Inflation

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Full text in case it gets paywalled/loginwalled:

85% of container ships that would’ve transited the Red Sea are now going around the southern tip of Africa as of this morning.

The ships diverting from their ordinary course are marked orange on the @flexport map below.

Flexport customers can see which of their shipments are affected in real time on their dashboard, along with updated transit time estimates.

Our teams are working hard to find solutions for customers who’s cargo was meant to be picked up or delivered to a port no longer served by one of the cancelled strings.

Ocean freight prices are spiking even on trade lanes that on the surface would not seem to be affected by the diversions like Asia to US west coast lanes. The longer sailing time around the Cape of Good Hope requires more vessels so carriers have had to pull capacity off those lanes onto the Asia to Europe trade.

Thus far we’ve not seen any impact on air freight prices as it’s the post holiday low season without all the e-commerce demand that drove the high air prices in Q4. A 747 cargo plane can only carry around 7 ocean containers worth of cargo though compared to 10,000+ for the mega container ships, so it won’t take a lot of companies deciding to shift cargo from ocean to air for the air cargo market to become capacity constrained.

Freight prices are some of the most inelastic in the whole economy: companies don’t adjust the quantity of products they ship based on the price of freight—they ship as many products as they can sell, and the price of freight is only going to change that equation for the lowest of margin products. That means demand exceeds available capacity, the market clearing prices can spike very rapidly, as we saw during the capacity crunches (largely demand driven) of ‘21-22.

I’ve been surprised by how little the air market has moved so far in January. I would’ve expected more of a spillover by now.

What do you think, will we see this impact air freight prices soon?

Also let’s all give thanks to the brave sailors who continue to transit the Red Sea despite the very real threat of getting hit by a missile. I probably would be too scared.