Logistics companies: shipping crisis or worse than Lehman crisis, but there's nothing the Fed can do about it.

Ryan Petersen, chief executive of Flexport, a US logistics company, recently warned that the current US port congestion could have a worse impact on the US and global economy than the "Lehman crisis", while the Fed could not print money to get out of the crisis.

"Port closures are worse than the collapse of Lehman Brothers, both of which would lead to a catastrophic collapse of all counterparties that rely on them. But for the Lehman crisis, all the government needs to do is print a lot of money and flood the banks with liquidity. " Ryan Petersen said after visiting a port on the west coast of the United States on Friday.

Petersen said his company hired a captain to inspect the two largest US ports, Port of Los Angeles and long Beach, which account for 40 per cent of shipping containers in the US. During the three-hour round trip and passing through each dock, fewer than 12 containers were seen unloaded.

According to him, there are always hundreds of cranes in the two ports, but only "seven are still running and seem to be running quite slowly", while "the containers on the docks are simply full. This means they have no room to load new containers from ships or on land. This is a real traffic jam. "

Petersen pointed out that the current bottleneck is not the shortage of cranes, but the overcrowded container terminals because there are no spare chassis vehicles to clear these containers out. The chassis vehicle storage method commonly used in the container yard-the container is stored on the yard together with the chassis vehicle for transporting the container.

Although President Biden issued a directive on October 13 announcing that the ports of Los Angeles and long Beach work 24 hours a day, seven days a week to solve the problem of port cargo congestion, they still appear to be at a standstill.

U.S. president Joe Biden said recently that he would consider using the National Guard to transport goods to help ease supply delays that have led to shortages and rising consumer costs.

Petersen proposes a "simple solution": state and federal governments work with ports, truck drivers and everyone else in the supply chain to set up temporary container yards to stack empty containers to six stories instead of two. This will release tens of thousands of chassis cars, which can be immediately taken to the port to tow away containers.

Or destroy the global economy.

Petersen said it was necessary to correct the current bottleneck as soon as possible because it was a "vicious circle that got out of control rapidly and, if it continued, would destroy the global economy."

Jordan Ligel (Jordan Alliger), an analyst at Goldman Sachs, agreed and asked clients to monitor port movements.

"the most significant congestion indicator is the number of container ships moored at the port waiting to be unloaded, which returned to 70 on Oct. 18 after reaching a record 73 on Sept. 19, compared with a pre-epidemic average of about 0 to 1," Alliger said.

Zerohedge, a well-known blogger, said that Petersen's view may be correct. Over the past 19 months, the Fed has exacerbated the shipping crisis by injecting unprecedented amounts of money into capital markets, but they have been unable to print money to get out of it. As port congestion intensifies, the circulatory system of the global economy may be at risk of collapse.