I’ve seen plenty of memes talking about how the ship being stuck is f*cking the encino my, but how does it? Or is it bullshit?
In: Economics
A lot of shipping that operates nowadays operates on very tight timelines. Factory A needs materials on April 4th, so the delivery is scheduled and sent out so that it arrives on April 3rd. The delivery assumes that the cargo can go through the Suez Canal.
Now, with the Ever Given (Evergreen is the company, Ever Given is the ship) blocking the canal for 6 days, the delivery is delayed. Now, Factory A can’t operate between April 4th and April 10th because they have no material. That means the factory is making no product, so they can’t sell as much this quarter. Their earnings are lower, so they maybe cut bonuses or give smaller raises at the end of the year.
Repeat this for however many companies were affected, and you’ll see that there will definitely be an impact on the economy. How bad, I don’t know, but you can’t block one of the most transited transportation routes for about a week without people missing their delivery deadlines and the knock-on impacts from that.
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