Shipping Companies Are the Winners of the Supply Chain Crisis

February 24, 2022 Topic: Supply Chains Blog Brand: The Buzz Tags: Supply Chain CrisisInflationShippingTradeU.S. Economy

Shipping Companies Are the Winners of the Supply Chain Crisis

Whether the ships sit off the coast or in port, the carriers are still paid.

From couches to cars, many products will likely remain in high demand this year as supply will be unable to meet demand. While the supply chain bottleneck is starting to ease, it is unlikely that things will be back to normal before the end of 2022.

Small businesses are still struggling with an insufficient supply of merchandise, and in early 2022, the furniture business is among those hardest hit. Inconsistent inventory is common across the country.

"It's not something that we can rely on, that's sort of a bigger struggle because you want to promise a shorter lead time on a sofa, for instance, you just can't right now,” Nick Johnson, owner of Su Casa Furniture in Maryland, told Yahoo Finance earlier this month. Johnson added that one of the biggest headaches is having to fly missing parts in from China. 

The other problem facing businesses of all sizes is inflation, which is now at a forty-year high. According to Johnson, some vendors have faced surcharges as high as 21 percent from suppliers and shippers.

"We can't possibly stay on top of every single one of those surcharge changes when we deal with something like 2 to 300 suppliers, each has their own formula and their own process," Johnson explained.

Shipping Companies Are Winning

Even as congestion remains at historic highs—and container ships are waiting an average of eighteen days to unload at the Port of Los Angeles—the big winners in the supply chain crisis could be the carriers. Whether the ships sit off the coast or in port, the carriers are still paid.

According to a report from Bloomberg, ocean shipping rates are expected to stay elevated well into 2022, which could set the industry up for booming profits for global cargo carriers.

"The spot rate for a 40-foot container to the U.S. from Asia topped $20,000 last year, including surcharges and premiums, up from less than $2,000 a few years ago, and was recently hovering near $14,000," wrote Bloomberg's Lauren Etter and Brendan Murray last month.

Rates set in contracts between carriers and shippers are currently estimated to be 200 percent higher than just a year ago, which has elevated prices for imported goods. Larger customers are more able to negotiate for better terms or absorb the added costs. However, small importers and exporters do not have the flexibility of major companies like Walmart and Ikea. That is especially true in poorer countries, which increasingly rely on carriers to haul the vast majority of their exported goods.

"Small- and medium-sized enterprises are being badly affected," Amruth Raj, managing director of Green Gardens, a vegetable processor based in rural India, told Bloomberg. Raj added that European buyers have complained about the higher costs, and as a result, more than half his company's capital has been wiped out in recent months.

While many businesses faced hardships during the height of the pandemic, the pandemic actually demonstrated how adept the carriers have become at managing the world's supply of cargo capacity. Carriers have insisted that the high prices are the result of the imbalance in supply and demand that came during the pandemic. While they say this problem will be resolved naturally, it currently seems that the carriers are using the supply chain crisis to fill their coffers.

Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on

Image: Reuters.