5 ms·

So, price gouging? Pretty shameful in a time like this (unless shipments of medical supplies are getting the normal rate from a few weeks ago).

chadlavi 7y ago
Sorry downvoters, is it not shameful to price gouge in a global pandemic?
- JumpCrisscross 7y ago
  > is it not shameful to price gouge in a global pandemic? Rising prices do not singularly mean price gouging. As others have mentioned, the global freight market is a relatively-efficient one. A single country regulating prices would only ensure that country reduces its own access. If a global consortium capped cargo rates, the quantity supplied would diminish. For example, it's more expensive to run cargo on passenger planes than on dedicated cargo planes. If you cap prices pre-crisis, those passenger planes would never run cargo profitably. So total capacity would be reduced. Freight rates rising are doing what they're supposed to. They're increasing the quantity supplied while rationing availability to the most-urgent users.
  - chadlavi 7y ago
    Sounds like they're rationing availability to the most cash liquid users. This is nothing more than price hikes to profit from a tragedy and it's shameful.
    - JumpCrisscross 7y ago
      > This is nothing more than price hikes to profit from a tragedy and it's shameful If it's shameful to move more freight in a crisis than less, let them be shameful. This sort of armchair moralizing, without the consideration of unintended consequences of one's proposals, if enacted into policy, can cost lives.
      - chadlavi 7y ago
        I don't care about price increases for non essential things, but the part that seems shameful to me is that, if I'm understanding this correctly, it also costs 3x or more to ship essential medical supplies now? That's the part I'm calling price gouging.
        JumpCrisscross 7y ago
        > it also costs 3x or more to ship essential medical supplies now? That's the part I'm calling price gouging. Price gouging is a specific form of market failure. This isn't that market failure. You may not like prices going up. That's fine. But that doesn't make it price gouging. Providers aren't making excess profits, they're commandeering higher-priced supply to meet unprecedented demand.
        gwright 7y ago
        The economic theory is extensive on this. You have to let the price float if you want the market to find the optimal way to increase capacity. If you insist on the price remaining steady even when the market conditions have changed radically you are choosing shortages in order to satisfy your belief that the price shouldn't change.
mullen 7y ago
Cargo transportation is probably one of few true free market sectors in the world economy. The Cargo hauls can't all get together and fix prices. There are just too many players and they all rely on Governments not getting angry that bunch of companies are artificially driving up prices during a pandemic.
Symbiote 7y ago
(Numbers invented.) When the cost of the flight was previously $300,000, of which $250,000 was covered by selling tickets to passengers, the freight on the plane had to pay $50,000. That was probably the reasonable price between ship/train/truck, and the faster plane. The cost of flying the plane without passengers is a bit lower (no cabin crew, no luggage handling, less weight), but there's still a huge cost that needs to be covered.

chadlavi 7y ago

Sorry downvoters, is it not shameful to price gouge in a global pandemic?

JumpCrisscross 7y ago
> is it not shameful to price gouge in a global pandemic? Rising prices do not singularly mean price gouging. As others have mentioned, the global freight market is a relatively-efficient one. A single country regulating prices would only ensure that country reduces its own access. If a global consortium capped cargo rates, the quantity supplied would diminish. For example, it's more expensive to run cargo on passenger planes than on dedicated cargo planes. If you cap prices pre-crisis, those passenger planes would never run cargo profitably. So total capacity would be reduced. Freight rates rising are doing what they're supposed to. They're increasing the quantity supplied while rationing availability to the most-urgent users.
- chadlavi 7y ago
  Sounds like they're rationing availability to the most cash liquid users. This is nothing more than price hikes to profit from a tragedy and it's shameful.
  - JumpCrisscross 7y ago
    > This is nothing more than price hikes to profit from a tragedy and it's shameful If it's shameful to move more freight in a crisis than less, let them be shameful. This sort of armchair moralizing, without the consideration of unintended consequences of one's proposals, if enacted into policy, can cost lives.
    - chadlavi 7y ago
      I don't care about price increases for non essential things, but the part that seems shameful to me is that, if I'm understanding this correctly, it also costs 3x or more to ship essential medical supplies now? That's the part I'm calling price gouging.
      - JumpCrisscross 7y ago
        > it also costs 3x or more to ship essential medical supplies now? That's the part I'm calling price gouging. Price gouging is a specific form of market failure. This isn't that market failure. You may not like prices going up. That's fine. But that doesn't make it price gouging. Providers aren't making excess profits, they're commandeering higher-priced supply to meet unprecedented demand.
      - gwright 7y ago
        The economic theory is extensive on this. You have to let the price float if you want the market to find the optimal way to increase capacity. If you insist on the price remaining steady even when the market conditions have changed radically you are choosing shortages in order to satisfy your belief that the price shouldn't change.

mullen 7y ago

Cargo transportation is probably one of few true free market sectors in the world economy. The Cargo hauls can't all get together and fix prices. There are just too many players and they all rely on Governments not getting angry that bunch of companies are artificially driving up prices during a pandemic.

Symbiote 7y ago

(Numbers invented.) When the cost of the flight was previously $300,000, of which $250,000 was covered by selling tickets to passengers, the freight on the plane had to pay $50,000. That was probably the reasonable price between ship/train/truck, and the faster plane. The cost of flying the plane without passengers is a bit lower (no cabin crew, no luggage handling, less weight), but there's still a huge cost that needs to be covered.