In 2021 one of the world’s biggest ships, the Ever Given, got stuck in the Suez Canal for six days.

It dammed up hundreds of ships – and cost world trade $10 billion per day!

It should’ve been a big wake up call for the shipping industry – and the aftermath of supply chain problems it, together with the Covid pandemic, created should have changed how businesses manage their supply chains.

But today very little has changed.

World trade is still uber dependent on the oceans, and specifically the route through the Suez Canal.

Around 50 tankers and container ships pass through the Suez Canal daily, and around a third of all world trade pass through here based on shipping volumes.

That’s why the current instability in the middle east, and specifically in the Red Sea is such a problem.

But one man’s problem is another’s opportunity as they say.

Shipping freight rates have shot through the roof, thanks to Ever Given

 

Ever Given

On this chart you can see the Baltic Dry Index. This index represents shipping costs and has risen 56% since July 2023 – whilst its December 2023 rate was an increase of 246% from the July 2023 level.

Simply put shipping rates have gone up as ships now have to take a longer, slower route around Africa instead of simply passing through the Suez Canal…

The largest container shippers, including Maersk and Hapag Lloyd, and some oil companies have announced re-routing of ships. Some shippers have also introduced surcharges for using routes to or from the Middle East, for shipments between Europe and Asia or calling on the ports in the region. News reports suggest that vessel traffic through the Canal is down by about a third.

Re-routing around Africa can increase travel time from the Far East to Europe by 50%, which could reduce effective global container shipping capacity by 10%-15%. Container ships could increase vessel speed and reduce the number of port calls to counteract longer routes. Current levels of idle capacity are already low.

So even when the unrest in the Red Sea dies down – there will still be an overhang to catch up on. But I suspect we’ll see these flare ups of violence and attacks on ships in the Red Sea continue for some time – it won’t be just an isolated situation.

But all this has created some great opportunities to profit. And I have my sights set on one particular company. In fact I believe its a double your money opportunity!

To get the details on this stock and two others, just go here.

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