FREIGHT PROBLEMS - PAUL SCOTT observations - Stockopedia26 Jul 2021 15:26
Freight problems - some interesting short articles in the sunday papers about the cost & delays of shipping goods from the far east. Things seem to be getting worse, and it seems to me fairly likely that we’re heading for profit warnings in many sectors that rely on importing large amounts of bulky, low value items. $20k per container is talked about, if you can find one at all, and delays, as ships are re-routed to take advantage of more lucrative routes. Shipping companies must be coining it in, maybe that’s an area to look at investing in?
Loads of companies that we report on here are flagging up delays & increased cost of shipping, and raw materials. Where does it all end? Logically, demand and supply should eventually rebalance, but not before it could do some nasty damage to our portfolios maybe?
Let’s hope we see more on-shoring. I don’t think it’s a good idea to become so dependent on extended & vulnerable supply chains, particularly from a one-party dictatorship which is becoming increasingly hostile. As the CEO of Supreme (LON:SUP) pointed out in the video mentioned above, if the labour content is 10% or less (which can be achieved using automation), then it’s feasible to make things in the UK. It’s also worth thinking about the environmental damage of all these ships moving things around from high polluting countries, to consumer markets in the West. We’ve not only exported many jobs since the 1980s, but we’ve also exported the pollution, and made it worse by using huge, polluting container ships. Everything needs a re-think, if you ask me.
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