May 22, 2024

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Who will pay the cost?

Who will pay the cost?

Written by Kostas Stupas

Who will pay the cost?

According to Vassilis Korkidis, President of the Piraeus Chamber of Commerce and Industry, the movement of import containers at the Port of Piraeus has decreased by 45% since the beginning of the year, while exports have decreased by 14% and transit freight by 20%.

According to him, the cost of transportation has almost tripled. 40ft container for example. Which used to come to Piraeus for $1850-1900, is now worth around $6,000.

The Houthi “rebellion” in Yemen in response to Israeli intervention in Gaza has dramatically reduced traffic through the Red Sea and Suez.

Traffic in the Suez Canal has fallen by about 55%, with 300 ships transiting weekly in both directions since early February.

The economic hit that Egypt is taking due to this development, coupled with the effects of rising food prices, poses a threat to the stability of the regime. If a problem arises in Egypt, geopolitical balances in the region become threatened and the possibility of increased migration flows increases.

But beyond that, for Greece and Europe, circumnavigating Africa increases the time and cost of transportation.

See: Piraeus port shocks from the Red Sea crisis

The Houthi “rebellion” as well as the events of 7Ha The October that led to the Israeli decision to neutralize Hamas are just links in a chain of geopolitical realignments and escalation of tensions.

Developments in the Middle East, along with those in Ukraine and the pandemic that preceded it, are radically changing the data for the Greek and global economies.

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The first shock of the decade starting in 2020 was the pandemic, the exceptional circumstances of which forced the West to redesign its supply lines by moving part of production closer to Asia.

The war in Ukraine has forced Europe to consider the possibility that some other Western countries might come into play.

To meet the needs of the war in Ukraine and also to rearm many European countries, significant investments are being made to increase the production of the European defense industry.

Recently, interest in taking over bankrupt state-owned defense industries seems to have arisen. The return of part of the production to the West and thus to Greece also increases the activity of some sectors. This creates jobs and new sources of wealth.

On the other hand, it increases production costs and thus prices, reducing the purchasing power of consumers.

Since 2020, a new era has begun in the Western economy. An era of protectionism, self-sufficiency and finally the adaptation of economies to the needs of potential war.

In recent years, therefore, an era has begun that moves in the opposite direction to the trends set in motion by the Reagan-Thatcher-Deng revolution, the collapse of the Soviet Union, and the Cold War.

This means that economies will stop paying the benefits of the welfare state and peace.

We are still at the beginning.

2) Profiting

Dear Mr. Stopa,

Regarding prices in supermarkets, about 2 months ago, Sklavenitis in Aegaleo had Rhodope goat yoghurt 1.20, A/B in Kifissos 2.00 and A/B in our area (franchise) 1.60, here certainly there is speculation, duty free is good but not debauchery.

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Constantinos Dikaios

Answer: Buy from where they sell cheaper. This way, you will also force those who sell at a higher price to lower their prices if they have a margin. Products that are close to their expiration date are often on sale. It is better to sell it without a profit than to incur the cost of returning it.

Also, sometimes, business establishments, in order to attract customers, choose some products to sell with low or no profit margin. Each company chooses different products that serve as the “bark.” By increasing sales of the rest, they cover the loss of supply and make a profit.

The power of the free market lies in price fluctuations. This flexibility creates sufficiency and prosperity. If one day you notice that all prices are the same and the profit motive (speculation) has been eliminated, it will only be a matter of time before shortages and bankruptcy follow.

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