JEDDAH: The global shipping industry is raking in huge revenues daily at a level not seen since 2008.
The sudden jump in earnings has been caused due to a 333 percent hike in shipping cost in the aftermath of the coronavirus outbreak, which disrupted the global supply chains, according to a Bloomberg report.
The hike in cargo charges, however, has raised the specter of inflation around the globe. An increase in transportation cost has a cascading effect on the overall economy and the end-user is affected the most.
Eighty percent of global trade takes place through the sea, which means the impact of the higher shipping cost will not be confined to one economic sector.
Currently, a 40-foot container from China to Europe costs $14,287, which is up more than 500 percent from a year earlier. The impact of the shipping cost does not stay here; it affects the prices of almost everything transported through such containers.
With the global economy reopening and rebounding from the pandemic, the containers sector is set for huge profits due to a rise in demand for raw materials and other items.
Logistics companies are making huge profits, for example, Maersk posted an estimated $5billion in earnings last month.
The spree is likely to continue for the shipping industry, as the demand for raw materials and other items is not expected to decline any time soon.