4 ms·
There was an article yesterday pointing out the perverse incentive that freight companies have to allow the supply chain problems top get worse. If you own a s
by bigiain 5y ago
There was an article yesterday pointing out the perverse incentive that freight companies have to allow the supply chain problems top get worse.
If you own a shipping port, it's in your best interests for thing to get worse right now and not better. You end up being able to charge premiums to jump queues, and end up making more profit by doing less work. Those guys are incentivised to ride the crashing economy all the way to the bottom, and not to lift a finger to slow it down.
And Bezos might be as well. Amazon quite likely could profit handsomely off a freight crunch that sees container prices go through the roof. There are very few retailers or wholesalers who'd have the bargaining power to get those queue jumping premium services for lower prices than their competitors, and when Amazon Prime becomes the only way to buy manufactured goods out of China, they can push the margins higher that other importers who either can't negotiate rates the way Amazon can, or who just can't get stock into the country at all.