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Supply
Chain by the Numbers |
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Feb. 27, 2025
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New Port Fee for Chinese Made Ships. Amazon Expects Huge Savngs from FC Robots. East Coast Dock Workers Ratify Deal. Ocean Carrier Stocks have Done Well, but with a Twist |
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19% |
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| That is the share of the world’s commercial fleet of cargo ships (container and bulk) that is carried in Chinese-made ships. Why is that in the news? Because late last week, the Trump administration proposed a plan that would levy millions of dollars in new fees each time one of these Chinese-made vessels enters a US port, adding costs that would likely be passed down to US importers and exporters through higher freight rates. The wild proposal would also affect large non-Chinese companies such as Maersk and MSC, which have purchased large numbers of ships from China’s vast shipyards. Large container ships make multiple calls to US ports, substantially multiplying the fees for a carrier if this were to be enacted. |
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| That’s what hourly wages will rise to by the end of a new six-year contract ratified this week by members of the the International Longshoremen’s Association (ILA), representing some 45,000 workers at East and Gulf Coast ports, and the United States Maritime Alliance (USMX), which includes the operators of port facilities. That wage hike is from $39.00 currently. The ratification comes after a deal was reached by both sides in January. In addition to the series of wage hikes, the deal gives dock workers better healthcare plans and puts some restrictions on the use of automation at the ports, which was a key point of contention during contract talks. |
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$3150 |
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| That is about how much money you would have today if you had invested $1000 in late 2029 in a broad basket of publicly traded stocks of ocean container carriers such as AP Moller Maersk, Cosco (Hapag-Lloyd and a number of others. The same $1000.00 invested in the US S&P 500 index would have produced $2346. That according to the maritime analysts Drewry last week. But the results are a little deceiving. Drewry notes that the extraordinary performance of container shipping stocks was entirely the result of extraordinary events, the COVID pandemic and ensuing period of supply chain disruptions. Together they sent liner shares soaring from November 2020 through May 2022. They have been trending down sharply since then. As of February 2025, Drewry’s Container Equity Index is down 50% from its peaks in late 2021 and 2022. |
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That is the level of annual savings that Amazon is likely achieve by the end of the decade from its huge investments in fulfillment center robotics. That according to an estimate of the robots’ financial impact from analyst at Morgan Stanley, as reported this week by the UK’s Financial Times. FT says Amazon will spend about$25 billion on FC robots this year. “We’re seeing today how fruitful this technology is in transforming our everyday,” said Tye Brady, chief technologist at Amazon Robotics, noting that it plans to “continue to invest” in automation. The freed-up cash will be used in part to invest massively in AI-based systems, the FT article notes.
