Shipping companies are having a bumper year, racking up profits while they can

holidays approach. For the heavyweights in the ocean freight business, though, the current environment is akin to an all-you-can-eat buffet — complete with the prospect of heartburn in the form of greater regulatory scrutiny and legal actions over“I would argue it’s purely a supply and demand question. Supply is maxed out right now, in terms of everything that can move containers is either chartered or being occupied,” said Willy Shih, a professor at Harvard Business School.

Donnelly predicted that shipping costs will remain at this elevated level not only though the holidays, but likely through the first half of next year. When the first wave of the pandemic arrived in the United States, officials took rapid, sweeping action to prevent economic collapse, enacting an unprecedented series of monetary and fiscal policies that shored up ordinary Americans’ buying power in spite of the widespread curtailment of commercial and social activity.

“Last week, like 78 or 79 ships were waiting to get into Los Angeles and Long Beach,” Shih said. “When ships are waiting, they’re holding either cargos or empty containers. That effectively removes capacity from the system,” he said, citing one estimate that some 13 percent of global capacity has been taken offline by these bottlenecks.

Historically, shipping has been characterized by boom-and-bust cycles. Now, companies are "racking up profits while they can."

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