Signals through the fog

Logistical disruptions are pushing apparent demand away from real demand, exacerbating the bull-whip effect

Over the past eight months, freight rates have risen rapidly. While bulk freight rates have risen too (in particular for the smaller ships), the increase is much sharper for containers, where spot prices have risen five to 10 times on some major routes. There is a shortage of container-ships as well as containers, and ship-building orders are surging.

This adds to the signals from surges in prices of coal, natural gas, steel, copper and aluminum in giving an impression of strong global demand for goods and of extreme shortages.

But while end-demand for goods has been above normal in the US, almost