Inherent Risk: A Tempest Rises Against the CCP
31 January 2021
Over a third of the containers transiting the world’s 20 largest ports last month failed to ship when scheduled. These backlogs are affecting prices of goods across the board, with the cost of imported industrial supplies rising 4.2% in December & 27% since April’s pandemic low, however this hardly captures the full picture of this developing situation, as prices of goods are actually a lagging indicator for changes in shipping and maritime risk. Typically, a more accurate indicator is what’s known as the FEU ocean auction price: the price at auction to transport a forty-foot equivalent unit of cargo, like a shipping container.
To that point, as of two weeks ago, shipping rates for China-UK cargo topped $16,000/FEU in ocean auction versus a high of $3,000/FEU just four months ago… an eye-popping increase.
Sudden spontaneous congestion at main shipping hubs certainly can’t account for a 5x increase in container shipping costs, so what then might? Your humble author would posit that it’s actually a reflection of insurance houses now charging fair rates for the risks associated with shipping China’s wares.
China’s shipping enterprise is inherently risky. There are rumors amongst the persecuted practitioners of Falun Gong that Chinese-owned shipping vessels — like COSCO, whose vessels, this author has been told by experts, nearly always have a PLA Navy flag officer aboard — are a key facet of China’s international organ harvesting and transplantation enterprise. As hipsters well know, shipping containers can easily be converted into affordable living spaces… but they can also be used as seafaring jail cells or free port (FTZ) field hospitals. Indeed, as the nascent pandemic spread from Wuhan and gathered steam, Chinese companies rushed to deploy container-based (even modular multi-container) hospitals.
Clandestine organ harvesting operating rooms are still a rumor, and indeed might be a myth, but those who know of the darkest aspects of the PLA’s underworld activities rarely go on record, so it's difficult to be sure. Such grisly hypotheticals aside, there are more tangible risks, like human trafficking, China’s YJ-18C container-launched cruise missiles (some of which are likely being sold to rogue regimes), Chinese shippers’ penchant for evading sanctions, and now entire Chinese ships being seized… including the ongoing case with Indonesia (36 Iranian and 25 Chinese crew members presently detained from two vessels during a sanctions-evading oil transfer).
That’s just covering Chinese shippers. Maersk and others likewise face increasing risk in carrying goods from China. For instance, the Maersk Essen, (capacity: 13,000+ FEU) lost an estimated 750 containers in choppy seas on January 16, about halfway through its trans-Pacific journey from the Port of Xiamen to the Port of Los Angeles. Hopefully there was nobody inside, and the containers were just filled with the standard things: drugs (90 lbs of Colombian cocaine found aboard the Foremost Group’s Ping May in 2014), weapons (Conflict Armament Research estimated 90% of the weapons and ammunition used by ISIS from July 2014 and November 2017 originated in China, Russia, & Eastern Europe), and of course, slave labor goods made by Uyghurs in China’s active genocide zone of East Turkistan (“Xinjiang”).
Coast guards and customs agencies rarely accept excuses for trafficking in illicit and sanctioned goods, whether it’s slave labor solar panels or military hardware destined for a sanctioned regime. Indeed, if coast guards and customs agencies can tap into an ever-growing amount of shipping data in order to figure out what cargo is aboard a vessel — if even random Internet researchers can figure such things out — then the operators should know, too.
Chairman Xi is fond of comparing Communist-Occupied China to a “Little Red Boat.” It’s more than a metaphor about the “ship of state” however, but a direct allusion to the Party’s founding. From July 23-30, 1921, 13 Chinese communists nationwide gathered at 76 Xingye Road in Shanghai to hold what would be CPC's 1st National Congress. The Congress was interrupted by police, so they fled to a tourist boat, now known as the “Red Boat,” on the South Lake in Jiaxing.
Indeed, to this forecaster’s eye, a dark and wrathful tempest is rising to meet the CCP’s cargo cult of genocide enablers, and these seas are in no forgiving mood.