The shipping crisis explained with Lego

Peter Hansen is a ship owner from Hamburg, his company's called Hansen Logistics. He transports clients' goods across the ocean on his small container vessel. His freight room is always booked out and he fetches a good price for every container on board. Business is going well.

Business is going so well, in fact, that Peter has already ordered a second, larger ship. Sea trade has been growing for years and with more freight room, he calculates, he can make more money.

But then an economic crisis strikes and international trade slows down rapidly. Peter barely gets any bookings on his ship. There is plenty of freight room but only little cargo, so his customers only pay a small price for every container on board. Hansen Logistics is making a loss.

The prices for container transport, the freight rates, keep falling - yet Peter's new ship is launched which costs him extra money. He is in deep water. He asks the bank for a credit but they turn it down, saying it's too risky for them. There's just no money to be made with shipping right now…

Peter gets so few bookings now that he doesn't really need his old ship anymore. He anchors it on the high sea and hopes things will look up again soon. That saves him some money but the idle ship still inflicts costs: The crew has to be paid; the machines have to be serviced…

With a heavy heart Peter finally decides to scrap his old ship - at least that way it won't cost him any more money. He still only gets a few bookings here and there, and still the pay is lousy. Hansen Logistics is close to bankruptcy. One big competitor has already gone down.

But Peter Hansen isn't ready to give up just yet. He teams up with other struggling ship owners. Their alliance plans routes together and shares freight room whenever possible to save money. And very slowly, more bookings are starting to trickle in again. So maybe Hansen Logistics will not go down after all.