Ship Happens: The Miniseries is a podcast that wouldn’t exist without the pandemic, which has left consumers ordering sofas and computer screens so voraciously that the world’s factories and ports couldn’t keep up.
But when furniture delays and vehicle shortages dominated the headlines last year, Eytan Buchman and his colleagues at Freightos, a global shipping platform, saw an opportunity.
“You never really pay attention to something until it’s broken,” said Mr. Buchman, the company’s chief marketing officer. “Part of it was hoax that, hey, people care.”
Freightos, which launched its supply chain podcast in November, is among a surge of data providers whose woks and once-esoteric offerings have been catapulted into the spotlight by a pandemic that has rewritten the rules of global trade and business.
Not that Mr. Buchman was happy that everything felt broken. But he saw that Freightos could help. He and his colleagues had a wealth of shipping data and expertise, and they began thinking about ways to share it with the world by compiling an index of sea container travel times, releasing the audio program, and increasing media exposure.
What could have been a brief moment of notoriety has lasted well into 2022. Nothing – not shipping lanes, not consumer spending, not the job market and definitely not inflation – seems to be behaving the way it did before the coronavirus outbreak in early 2020.
Inflation is at its highest level in 40 years and next week’s data is likely to show that prices have risen more than 8 percent for the year to March. Supply chains remain in turmoil, employers are desperate to fill vacancies, and Americans have surprised economists by spending despite rapid price increases and rampant uncertainty.
Researchers and policymakers are flying blind, and both they and ordinary people turn to experts like Mr. Buchman when they try to chart a new map of a changing economic landscape.
“A very select group of enlightened people were interested in supply chain before, but it wasn’t a widespread passion,” said Phil Levy, chief economist at Flexport, a freight forwarding and customs brokerage firm, showing the kind of supply chain that’s even larger in audience , relatively speaking, enjoy it now.
According to a profile maintained by Bloomberg, Mr Levy has amassed 26 unique media mentions so far this year, up from 26 for all of 2021 and 15 in 2020. Suddenly every economist and business writer seems to be a trade analyst trying to figure out what could happen with deliveries and prices.
Understand US inflation
“Typically, when making forecasts, you look at past experience,” said Mr. Levy. “That changed with the pandemic.”
The revolution started in the toilet paper aisle. With the onset of the pandemic, consumers suddenly shopped differently. Nobody needed coffee to go or manicures; Everyone wanted new home office furniture.
As the government repeatedly sent out stimulus checks and offered more generous unemployment insurance and families spent more time at home, Americans spent the money on goods rather than services, which ate up a large chunk of their budget before the pandemic. Even though the aid has waned and business has returned to something close to normal, the demand for things has remained unusually strong.
The world’s ships, ports and factories fell behind early in the pandemic and failed to fully catch up. The situation was only exacerbated by unforeseen disruptions such as a huge cargo ship getting stuck in the Suez Canal. The Ever Given spent six motionless days drawing global attention to the precariousness of supply chains and trade at sea – and raising demand for experts who could explain it.
“That was a turning point in cargo fame,” Mr. Buchman fondly recalled.
For Mr. Levy and his colleagues, the situation wasn’t funny per se — the blockade threatened to cause problems for customers — but it did trigger a spate of memes in Flexport’s internal Slack messaging channels. (One he remembered was a photo of the stranded ship overlaid with the words “I told you not to listen to Waze instructions.”)
Ever Given symbolizes a larger phenomenon in the pandemic economy: disruptions recur, throwing an already ailing system even further off balance. The mismatch between supply and demand has fueled inflation, which has surprised policymakers both because it has been so rapid and because it has proven to be durable.
And the upheaval goes beyond the world of shipping.
Businesses are unable to find enough workers, in part because the pandemic appears to have accelerated a demographic shift. The baby boomers who were reaching retirement age were exiting the labor market in large numbers – and it’s unclear if they will return. Parents who had to deal with unpredictable childcare also left the world of work. Employers are grappling with the possibility that workers are in the midst of a “big layoff” potentially bolstered by savings amassed during the pandemic. The bottlenecks in the labor market have given them the opportunity to demand higher wages and better working conditions.
As the coronavirus era enters its third year, economic conundrums abound: Will these workers come back? Will America’s appetite for new couches ever be satisfied? Is there a price consumers don’t pay for cars?
Fiona Greig doesn’t have all the answers. But she has data that could allow her – and others – to get closer than they otherwise would.
“I’m now getting inbound inquiries from wealth managers in Germany from every corner — our own Federal Reserve Bank, the White House, etc.,” said Ms. Greig, director of consumer research and co-president of the JPMorgan Chase Institute.
At the beginning of the pandemic, the institute focused on a metric that was of great interest to many people: what people were able to spend. The now much-cited chart uses Chase data to show near real-time how much money households in different income brackets have in their checking accounts, and Wall Street politicians and econometricians alike have used it to measure the purchasing power of different consumer groups.
Frequently asked questions about inflation
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What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar won’t go as far tomorrow as it did today. It is usually expressed as the annual change in the price of essential goods and services such as food, furniture, clothing, transportation and toys.
What Causes Inflation? This may be the result of increasing consumer demand. However, inflation can also rise and fall on developments that have little to do with economic conditions, such as E.g. limited oil production and problems in the supply chain.
Is inflation bad? It depends on the circumstances. Rapid price increases mean problems, but moderate price increases can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation usually spells trouble for stocks. Financial assets in general have historically performed poorly during inflationary booms, while tangible assets like houses have held up better.
“We now have a ‘request data’ button and people are requesting it from all sides,” Ms. Greig said.
She and her team have also written about the small impact that expanded unemployment benefits have had on keeping job seekers at home – jobs that made their way to the big news outlets. Ms Greig can feel the impact of her heightened pandemic fame: “Friends I haven’t been in touch with in a long time were like, ‘Hey, nice to see you in my morning feed.'”
The surprise data celebrities react differently to the attention. Ms. Greig, who has been at the institute since 2014, believes increasing public familiarity with his data will spur new academic research even as the pandemic subsides.
Freightos’ Mr. Buchman believes mainstream interest in shipping will wane, but he believes economists and companies will be more aware of supply chain issues than before.
“We’re in a part of the economy that we consider to be the be-all and end-all of society,” he said, noting that this was a moment to “spread the cargo gospel.”
And for Mr. Levy at Flexport, whose team was just being built at the start of the pandemic, a return to some sort of normalcy – whatever that means and whenever it comes – would be welcome.
“We’re striving to get to the point where we’re the ones thinking about supply chains,” he said, rather than hedge funds, central banks, major international organizations and governments regularly asking for his team’s assessment of when port backups happen fading as container backlogs normalize or for updates to Flexport’s overseas delivery on-time delivery indicator.
But it’s not clear when any version of normalcy will return. Supply chains remain a mess. Labor shortages are showing no clear signs of abating and policymakers are eagerly awaiting signs that inflation is cooling, but so far it has only accelerated.
Port stops and delays have shown signs of easing, but the war in Ukraine is pushing up oil and other commodity prices. It’s also disrupting air travel as planes fly through Russian airspace, carrying lighter cargo to make the longer journey more affordable, and it threatens to upend global food supplies, especially grains.
Mr Buchman said it could take six months to a year for supply chains to return to normal – “Ship Happens” is ongoing.
In fact, it’s likely that the ship will still be underway even as capacity begins to recover.
Companies could invest so much in new ships and planes that the world is about to enter a new era of oversupply, Mr Buchman said – what people like to call the “bullwhip effect”. If so, listeners might just need a podcast for that.
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