Founding a shipping company: Where to start? What are the challenges?

[abandance]

Hello,

selling online I've noticed that sea freight from China to Europe has become crazily expensive.
A 20 feet container was $1000 two years ago. Now, a 20 feet container costs $6000. Similarly, $1500 for a 40 feet container has become $12000.
Obviously, the incident in the Suez canal cannot be the reason for these crazy prices as the canal has been clear for many weeks now.

It doesn't take a math genius to figure out that if $1000 was profitable, the $6000 price includes more than $5000 profit.
A container ship that transports 500 containers from China to Europe will bring $2.5 million in revenue!

It looks like a highly profitable business.
The question is where to start and how to fund a container ship. I can imagine such a ship costs at least $1 million, probably even much more like $10 million.

Looking forward to your feedback and suggestions!

 

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[Steeltip]

Sure a container has gone from $1000 - $6000. But did it go up because there is less supply and more demand than in the past? How would you go about financing a container ship? Who would pilot it?

 

[Stargazer]

The pandemic caused a halt in international shipping. The containers were therefore sitting in ports around the world which in turn caused a massive shortage.

That is why the price shot up.

As things are slowly getting back to normal, those millions of containers can start to get back to places such as China, Turkey wherever and be filled up and moved again.

Dan

 

[Steeltip]

Well if you can find a way to capitalize on that then hell ya man go for it. I assume that the price inflation wont last forever though.

 

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[Walter Hay]

@Stargazer is spot on.

A big factor in all those containers sitting empty was the wharf strikes in a number of countries. In Australia for example strikes led to shortages of pharmaceuticals that left doctors hard pressed to find alternative treatments for sick patients.

The OP needs to understand that shipping empty containers back to exporters' ports costs as much (or very close to it) as shipping full containers.

Anyone wanting to start a shipping business would need very deep pockets.

Walter

 

[BizyDad]

Don't forget ships were scrapped for their metal also (because a year ago there was a metal shortage and ships weren't allowed into ports), so there are less ships on the oceans now vs. then.

Cargo Vessels and Cruise Ships Line Up for Scrapping

Cargo ships and cruise liners are being scrapped in growing numbers as operators hit by the fallout of the coronavirus pandemic look to turn their unemployed vessels into cash by selling them into the recycling market.

www.wsj.com

 

[biophase]

It doesn't take a math genius to figure out that if $1000 was profitable, the $6000 price includes more than $5000 profit.

LOL

Things change, costs change, businesses don’t just increase pricing for no reason.

 

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