5 ms·

I own a wholesale toy business and the entire cost increase for us is ocean freight. A 40’ container from Asia used to cost 3k, now it’s 12k to 15k (and takes m

I own a wholesale toy business and the entire cost increase for us is ocean freight. A 40’ container from Asia used to cost 3k, now it’s 12k to 15k (and takes months longer). If a 40’ container can carry 10k units, that’s a unit cost increase of over a dollar just for freight.

gt565k 5y ago
I feel like it'll only get worse as we move past covid and everything is open at 100% like it was pre-covid.
- Zigurd 5y ago
  Ocean shipping has been a boom/bust business since forever. It is possible "this time is different," and there are articles with exactly that headline, citing moderation in ordering new ships, but I don't see why such restraint will last.
TakuYam 5y ago
Is that due to capacity at ports being restricted by lack of downstream capacity (ie trailer availability)?
- cool_dude85 5y ago
  I have read, without a lot of evidence to be fair, that port capacity is a small part of it. Overseas container shipping companies had, pre-pandemic, been competing so heavily that they were often running a loss and hoping to make it up on volume. They used the pandemic to sort of consolidate and lower capacity by decommissioning ships and so dramatically increase per-container price. Not sure if there's a lot of clear evidence for it, but it's one explanation I read.
acd 5y ago
Central banks try to keep inflation at 2% by controlling local wage inflation. However markets are globalized so price of imported goods are energy price shipping plus foreign wage inflation. Thus local central banks cannot control foreign wage inflation and thus inflation. Local inflation is also exported through export prices but that currency exchange rate can control to some extent.
yborg 5y ago
If only a nation could manufacture things locally and not be required to get them from Asia...
- WalterBright 5y ago
  They could, but the government has made it too costly to manufacture locally.
  - jandrese 5y ago
    The government made the companies start accounting for externalities like not poisoning the rivers and not having the workers fall entirely on the government dole the instant they retire. So companies did what they do and went to countries that didn't care about protecting the environment or populace. Blaming the government for this state of affairs is misguided.
    - tengbretson 5y ago
      The government could stop signing free trade agreements with other countries that don't similarly protect the environment or populace.
      - spiralx 5y ago
        Sadly the TPP was abandoned along with the significant environmental and worker protections it would have imposed, neither of which I can see being a feature of China's replacement for it.
    - WalterBright 5y ago
      The regulations go far, far beyond environmental issues. For example, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/ https://www.whitehouse.gov/briefing-room/presidential-action...
      - 5y ago

gt565k 5y ago

I feel like it'll only get worse as we move past covid and everything is open at 100% like it was pre-covid.

Zigurd 5y ago
Ocean shipping has been a boom/bust business since forever. It is possible "this time is different," and there are articles with exactly that headline, citing moderation in ordering new ships, but I don't see why such restraint will last.

TakuYam 5y ago

Is that due to capacity at ports being restricted by lack of downstream capacity (ie trailer availability)?

cool_dude85 5y ago
I have read, without a lot of evidence to be fair, that port capacity is a small part of it. Overseas container shipping companies had, pre-pandemic, been competing so heavily that they were often running a loss and hoping to make it up on volume. They used the pandemic to sort of consolidate and lower capacity by decommissioning ships and so dramatically increase per-container price. Not sure if there's a lot of clear evidence for it, but it's one explanation I read.

acd 5y ago

Central banks try to keep inflation at 2% by controlling local wage inflation. However markets are globalized so price of imported goods are energy price shipping plus foreign wage inflation. Thus local central banks cannot control foreign wage inflation and thus inflation. Local inflation is also exported through export prices but that currency exchange rate can control to some extent.

yborg 5y ago

If only a nation could manufacture things locally and not be required to get them from Asia...

WalterBright 5y ago
They could, but the government has made it too costly to manufacture locally.
- jandrese 5y ago
  The government made the companies start accounting for externalities like not poisoning the rivers and not having the workers fall entirely on the government dole the instant they retire. So companies did what they do and went to countries that didn't care about protecting the environment or populace. Blaming the government for this state of affairs is misguided.
  - tengbretson 5y ago
    The government could stop signing free trade agreements with other countries that don't similarly protect the environment or populace.
    - spiralx 5y ago
      Sadly the TPP was abandoned along with the significant environmental and worker protections it would have imposed, neither of which I can see being a feature of China's replacement for it.
  - WalterBright 5y ago
    The regulations go far, far beyond environmental issues. For example, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/ https://www.whitehouse.gov/briefing-room/presidential-action...
    - 5y ago