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by poooogles 899 days ago
From China to the EU it adds roughly 1/3rd to the time, which is a decent proxy for cost. There are savings in not having to pay Suez fees but these don't seem to make a huge affect to shipping costs.

It's probably worth adding that going round the cape doesn't add just more cost to fuel and time, insurance for cargo down there isn't cheap either as the weather is very changeable.
1 comments
bryanlarsen 899 days ago
It's a great proxy for cost, but price has more to do with availability than with cost. I'd expect price to go up a lot more than 1/3rd, especially if this drags on.
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AnimalMuppet 899 days ago
Right, price is driven by supply and demand. If your ships have to travel 4/3 as far, you have ships available at 3/4 of the previous rate, so the supply of shipping went down. Demand didn't, so the price goes up.
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marvin 899 days ago
If any Norwegians are reading, which are shipping nerds by virtue of geography, speculating in this market is essentially why John Fredriksen, the Warren Buffett of shipping, is rich.

Shifts in ship availability causes waves of bankruptcy, and either gluts or shortages (whatever happens to be most inconvenient at the time).

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