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“Worse than the Suez Canal”: Global supply chain nightmare | ticker VIEWS

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The current disruption to cargo has surpassed March’s Suez Canal disaster. What does this mean for the shipping industry, businesses and consumers?

Well, be prepared for weeks on end of delays – and that’s just the beginning of this supply chain nightmare.

“WORSE THAN THE SUEZ CANAL’

Amazon Prime Day is coming up next week and it’s the biggest day of the year for the online retail giant.

As consumers increasingly turn to online retail, are freighting companies keeping up with demand?

Why are freight companies under stress?

In the wake of one of China’s busiest shipping ports closing down last month due to a COVID-outbreak, freighting companies find themselves at breaking point.

With the industry just getting back on its feet following the Suez Canal blockage, experts are concerned that this latest delay will have even more significant consequences.

China’s Yantian Port says it will be back to normal by late June, but it may be months before the cargo backlog clears and the global ripple effects subdue.

AP Moller MARSK is the world’s number one container carrier and says “the trend is concerning, and unceasing congestion is becoming a worrying problem.”

Ocean strategy company Flexport also shares these concerns, believing the congestion will take six to eight weeks to settle.

This is of particular concern because it extends disruptions into the peak Christmas and holiday seasons, as retailers and importers ramp up their shipments.

Maritime expert Alison Cusack says the knock-on effects from this delay are enormous and consumers will feel the pinch.

When will we see the shipping sector return to normal?

Well, don’t hold you breath. Cusack says at least 2022… “If we’re lucky”

What does increased cost of cargo mean for me?

Experts are warning that consumers may begin to feel the pinch from rising shipping costs, as the price of transporting goods by sea skyrockets.

Recetn figures show the transportation of a 40-foot steel container ship between Shanghai and Rotterdam now costs over $10,000, that’s a huge 547 percent increase on the average price.

Around 80 percent of the world’s goods are transported by ships, meaning the costs will be largely unavoidable for both consumers and businesses

Toy importer, Gary Grant says “during 40 years in toy retailing he has never known such challenging conditions from the point of view of pricing.”

It’s believed the rise in costs is associated with a number of factors, from soaring demand to a shortage of containers, busy ports and a limited workforce.

The disruption to the shipping industry could lead to shortages in the lead up to Christmas.

An outbreak of Covid-19 in a province in southern China is causing congestion at the region’s ports.

Shipments have now been delayed… adding to the tensions within global supply chains, the knock-on effects could take many months to resolve.

This is the latest in a series of severe setbacks for the industry and experts says that problems in just one region can have ripple effects around the world for several months.

The cost of cargo mishaps on the environment

Two weeks ago, a chemical-laden cargo ship sunk off the coast of Sri Lanka amid fears of a major environmental disaster.

Hundreds of tonnes of engine oil possibly leaked into the sea, with a devastating impact on marine life.

Sri Lankan and India worked together to put out the fire and prevent the ship from breaking up and sinking.

X-Press Shipping – the Singapore based company which owns the vessel – confirmed the crew had been aware of the leak, but say they were denied permission by both Qatar and India to leave the ship there before the fire broke out.

The fact that Sri Lanka allowed the vessel to enter the country’s waters after it was rejected by two other nations has led to widespread public anger.

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US stocks face tests from Tesla, Netflix earnings

US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

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US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

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In Short:
– Earnings reports from Tesla and Netflix might affect U.S. stock performance next week amid high inflation concerns.
– Increased market volatility arises from U.S.-China trade tensions and fewer S&P 500 stocks in an uptrend.
This coming week, earnings reports from companies including Tesla and Netflix are anticipated to impact U.S. stock performance.
Investors are also awaiting delayed U.S. inflation data, which could test market stability as it remains near record highs.Recent trading activity has shown increased volatility, influenced by ongoing U.S.-China trade tensions and concerns regarding regional bank credit risks. The CBOE volatility index has seen a rise, indicating increased market uncertainty.

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The S&P 500 entered its fourth year of growth amidst these fluctuations, having previously experienced a period of calm. Experts suggest market risks are intensifying as valuations reach peak levels.

Market Volatility

Concerns regarding U.S.-China trade relations escalated last week when the U.S. threatened to raise tariffs by November 1 over China’s rare-earth export policies. President Donald Trump is scheduled to meet with President Xi Jinping in two weeks to discuss these issues.

Despite these challenges, major stock indexes gained ground over the week, with the S&P 500 up 13.3% year-to-date. However, a noticeable decline in the number of S&P 500 stocks in an uptrend raises caution among investors about underlying market weaknesses.

The upcoming third-quarter earnings will be closely monitored, especially as the government shutdown halts economic data releases. Companies like Procter & Gamble, Coca-Cola, RTX, and IBM are due to report. The delayed U.S. consumer price index is also expected to provide crucial insights ahead of the Federal Reserve’s monetary policy meeting on October 28-29.


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Australia’s unemployment rate rises to 4.5 per cent

Australia’s unemployment rate rises to 4.5 per cent in September, prompting calls for potential Reserve Bank interest rate cut

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Australia’s unemployment rate rises to 4.5 per cent in September, prompting calls for potential Reserve Bank interest rate cut

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In Short:
– Australia’s unemployment rate rose to 4.5% in September, the highest since November 2021.
– Economists note a cooling labour market, with fewer job ads and increased participation rate amid rising living costs.
Australia’s unemployment rate increased to 4.5 per cent in September, up from 4.3 per cent in August.It marks the highest seasonally adjusted unemployment rate since November 2021.

Economists suggest that the Reserve Bank should consider another interest rate cut next month. BetaShares chief economist David Bassanese noted a slowdown in employment demand as the labour market struggles to accommodate job seekers.

The number of officially unemployed rose by 33,900 in September, while the employment count increased by 14,900. The labour force expanded by 48,800 people, resulting in a participation rate rise of 0.1 percentage points to 67 per cent, returning to July levels.

In trend terms, the unemployment rate remained steady at 4.3 per cent.

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Labour Market

BDO chief economist Anders Magnusson stated that while the unemployment rate has increased, the labour market is cooling, not collapsing.

He pointed out that the 14,900 jobs added in September were slightly below the average for the past year.

A growing participation rate indicates that rising living costs are prompting more individuals to seek employment. Magnusson said the release confirms a gradual cooling of the labour market that keeps the Reserve Bank on track without necessitating immediate action.

He added that hiring activity is slowing, signalled by a 3.3 per cent drop in job advertisements in September, the largest monthly decrease since February 2024.

Despite this, he does not foresee a rate cut in November.


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Stocks rebound after Trump eases China trade tensions

Stocks rebound 600 points as Trump eases China trade tensions, signalling optimism in markets following Friday’s sell-off

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Stocks rebound 600 points as Trump eases China trade tensions, signalling optimism in markets following Friday’s sell-off

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In Short:
– Stocks rose on Monday after Trump expressed optimism about trade relations with China.
– The Dow Jones gained 621 points, with significant increases in tech stocks and broad market recovery.
Stocks gained ground on Monday, recovering from Friday’s decline after President Donald Trump expressed optimism regarding trade relations with China, stating they “will all be fine.”The Dow Jones Industrial Average rose by 621 points, approximately 70% of its previous loss. The S&P 500 experienced a 1.6% increase, nearing a 60% recovery of its earlier drop. The Nasdaq Composite increased by 2.3%, bolstered by rebounds in technology stocks.

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Oracle’s stock surged over 5%, with AMD and Nvidia seeing 1% and 3% increases, respectively. Broadcom’s stock jumped 10% following the announcement of a partnership with OpenAI.

Trump’s comments hinted that he might not impose a significant increase in tariffs on China, which had previously caused market turmoil. Vice President JD Vance similarly indicated a willingness to negotiate with China, while also asserting that the U.S. holds advantages in potential trade discussions.

Broader Recovery

Monday’s trading saw a positive shift with four out of five S&P 500 stocks rising, indicating widespread recovery. Small-cap stocks also made gains, with the Russell 2000 rising over 2.5%.

Market concerns persist, however, with a government shutdown continuing and a major payroll deadline approaching on October 15. Earnings reports from major financial institutions, including Citigroup and JPMorgan Chase, are expected this week, potentially impacting market sentiment.


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