Why is Everything so Expensive?

Recently I've been looking for something relatively simple: a folding canvas outdoor chair. 

Pre-pandemic, you could have picked one of these cheap chairs for less than a tenner. The going rate was about £8.

Now, you can double or treble that amount. 

But why? What is making such originally cheap goods so expensive? Is there some post-pandemic profiteering going on?

Well, sort of. The big Shipping companies saw an opportunity during the pandemic to dispose of their smaller container ships. Now, this was a logical step: the ships were laid up at anchor with crews on board, so they were being paid, but the ship wasn't earning money.

The companies then decide after a few months that this may be a good time to pay off the crews and scrap the smaller, less efficient ships. I say efficient, what I really mean is cheaper to run. Instead of a crew of 15 being in charge of 10,000 containers and earning the revenue from them, the companies could instead have a crew of 15 on a AAA container ship in charge of 50,000 containers. So the smaller container ships went off to the scrapyards of Pakistan. Where incidentally, Covid wasn't really a thing, certainly lockdowns weren't. So the ships were processed in short order.

Which is great, had the pandemic continued and the shipyards been able to produce enough AAA container ships to match the global demand.

Well, it didn't quite go to plan. The world opened up within a matter of weeks and the demand for imported goods spiked almost immediately. 

And now there weren't enough ships to move the containers. Yes there were the handful of AAA container ships available from before the pandemic, but the smaller ships were gone, scrapped, never to return. 

There simply wasn't enough capacity. So the law of supply and demand kicked in and shipping prices started to skyrocket as importers struggled to guarantee supply chains. The pre-pandemic shipping cost of moving a container from the Far East ballooned from £1500 pre-pandemic, to ten times that within weeks of the pandemic ending and the world opening up. And this was before the price of oil went up. This was just a week or two after the pandemic when oil was relatively cheap.

The going rate now is around £20,000 to £30,000 because the increased price of oil has been added into the mix. To ship a single container. Failure to pay usually ends up in severe delays as your container gets gazumped and bumped off the ship in favour of someone paying more. That's how the market works now. To guarantee supply, you have to pay dearly.

Which gets me back to the folding chair at the start of the article. How many can you get into a container? As a simple maths exercise say 10,000 chairs. 

Instantly the shipping cost per chair has gone from a negligible 15p to a pretty substantial £3. 

So along with the other increased costs like wages, local transport and energy, that £8 chair is now looking more like twice that. 

And that's the thing, these are not insubstantial increases. It's no wonder inflation is so high. The cost is in-built because that particular item is being shipped half way round the world. 

But that's the weakness in globalist theory. Yes, you maximise profits, but there is a risk. Sadly the global corporations mitigated the risk by controlling governments who handed out large sums in compensation for their losses.

During this pandemic the whole world shut down. Products made in Malaysia or Taiwan had to wait for their governments to open up and then take weeks or months to restart full production from scratch.

This should be a lesson to the globalists that their ideology is not robust. Relying on a handful of shipping companies to transport goods from places thousands of miles away is a risky practise. 

So is relying on your ideological enemy to provide the bulk of your energy needs. 

We have to get back to a more local production and supply chain. Maybe not duplicating production in every town and city, but at the very least each continent should have the facilities to produce everything that continent needs. Most continents have the majority of raw materials and workforce able to do this.