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Container shipping has cratered, as ship owners try to avoid unprofitable trips
- Zetice 3y agohttps://archive.is/ckAd1 https://archive.is/ckAd1
- notho 3y agoEveryone in an public or private position of influence over the economy should be barred from running more than a 7-11 after the covid fiasco. Anyone claiming there isn’t any evidence the production of necessities is a zero sum game from the perspective of the average person is a deluded fool. Inflation deflates the public to stabilize and grow buying power of imaginary asset owners. It’s a viral game of make up a reason why a minority are free of real work keeping them breathing.
- gnarbarian 3y agodoes this mean we can get cheap containers?
- mberning 3y agoNo, it means you can ship cheap trash from point A to point B, but people on either end will be too poor to buy it.
- noduerme 3y agoOn the contrary, it means people's spending power is increasing because supply is getting cheaper.
- reaperman 3y agoThat would only be true if the solution was a debottlenecking of transportation points such as port loading/unloading. If the equilibrium solution was "volumes stagnated but people got priced out of goods because shipping was too expensive", then not so much.
- mberning 3y agoThe demand for shipping containers is driven by demand for goods which is driven by consumption which is declining because people do not have the money for imported goods. Many people are struggling just to make rent and put food on the table. Buying things imported from abroad is on the back burner. The spending power of the consumer, or lack, is why demand is down and supply up.
- listenallyall 3y agoSure, you can always find some people struggling. But your statement simply doesn't match reality. Retail sales are growing fast https://nrf.com/media-center/press-releases/nrf-forecasts-2023-retail-sales-grow-between-4-and-6#:~:text=In%20total%2C%20NRF%20projects%20that,and%20%245.23%20trillion%20this%20year https://nrf.com/media-center/press-releases/nrf-forecasts-20.... Discretionary spending on travel is through the roof. https://www.mastercardservices.com/en/reports-insights/economics-institute/travel-industry-trends-2023 https://www.mastercardservices.com/en/reports-insights/econo...
- mberning 3y agoYou seriously want to toss out travel spending as an indicator of how well things are going for the general population? Travel is a luxury, and rich people are not hurting yet. The people at the bottom of the economy ,your average walmart and target shopper, is who is hurting. Also, raw dollars is not a good metric for how much stuff is being bought. Sales in dollars can be way up, but the amount or quantity of goods can be flat or down when those goods are being purchased with a rapidly debased currency.
- chii 3y ago> goods are being purchased with a rapidly debased currency. so you can check if the increase is caused by debasement by looking at the inflation; if the increase in sales dollars is higher than inflation, it means that the debasement isn't an explanation of the increase in sales figures.
- listenallyall 3y ago
- grugagag 3y agoToo many paperclips on the market. Marketing levels need a boost.
- dalyons 3y agoThat’s a pretty manipulative graph. Show the pre pandemic spot rates! From the article “ Box-ship operators were among the biggest pandemic winners. Orders for imported goods began to climb in 2020 …” so why doesn’t it show 2020 then?
- shagie 3y agoFor a larger timeframe (and more spot rates): https://en.macromicro.me/collections/4356/freight/44756/drewry-world-container-index https://en.macromicro.me/collections/4356/freight/44756/drew...
- swyx 3y agoi checked the BDI https://tradingeconomics.com/commodity/baltic https://tradingeconomics.com/commodity/baltic its exactly at the historical 30 year average. nothing to see here lol
- eru 3y agoDo you know how that index works? Is it inflation adjusted? (Does it even include price components that would need to be inflation adjusted?) https://www.balticexchange.com/en/data-services/market-information0/dry-services.html https://www.balticexchange.com/en/data-services/market-infor... ostensibly has some information on the index, but it's hard to tell. If it's not inflation adjusted, then being on the 30 year nominal average is actually a substantial decline in real costs over time.
- dandellion 3y agoIf the chart is not inflation adjusted it means it had been declining in real costs for the 27 previous years, so why is it only a problem now?
- eru 3y agoOh, shippers complain from time to time about cost pressures. It's not a problem only now as far as I can tell.
- tomrod 3y agoSounds like some of the companies are playing a war of attrition to drive competitors out of the market.
- CGamesPlay 3y ago> The rates for both trade lanes are hovering around 2019 levels, but fuel and labor expenses are higher now than before the pandemic. Hard to really feel like this is a crisis, since all of the reporting is how there was a brief, glorious period (for the companies) of 10x prices, and the crisis is that the period is ended.
- somethoughts 3y agoDefinitely feels like there should be a "law of headlines" coined to effect of - something must always either be surging catastrophically or plummeting disatrously.
- glup 3y agoAnd that’s an inclusive “or”, mind you-- I remember an Al-Jazeera news story that opened with the line “Some say the new measures go too far… but do the new measures go far enough?”
- bandrami 3y agoIt's annoying because the "Critics charge X but supporters say Y" is an easy template for lazy journalism, and you invariably end up just re-typing the press releases of two competing advocacy organizations. If the Association of Umbrella Manufacturers says it's raining outside and the Organization of Sunscreen Bottlers says it's sunny, the reporter needs to open the window and look rather than just forwarding those statements; I can read them myself if I want to.
- orwin 3y agoExactly my grip with CNN and others news channel trying the 'middle ground' like BBC. I'd rather watch media with declared bias like Fox News than CNN/BBC where the bias is only visible in subject choices and editors/presentators are afraid to get wet. Upside : that's allow for a quick U-turn. By the way, I know an independent journalist: the version you get on TV is often the editor's cut. Sometimes journalists are only reporters, but more often than not there is censorship (or self-censorship for non independent journalists) in the editor's room. That's why report from the same journalist can be used by 'liberal news' and ' conservative news' (not idea if that happens in the US, but in my country it does.) Honestly, you'll be better served with local newspapers. Or independent local news.
- bandyaboot 3y agoThe shipping companies should be fine because they were prudent and kept some of that pandemic windfall in reserve to cover for this scenario…right?
- peepeepoopoo6 3y ago[flagged]
- bandyaboot 3y agoThat’s not quite accurate. https://theloadstar.com/hapag-lloyd-racks-up-massive-3-4bn-profit-in-q3-with-much-more-to-come/ https://theloadstar.com/hapag-lloyd-racks-up-massive-3-4bn-p... > Putting the fifth-largest ocean carrier’s earnings into context, [their profit for the first three quarters of 2021 exceeded] its return from the whole of the past five years.
- listenallyall 3y agoWith all due respect, that appears to be cherry-picking. Why focus on the 5th largest company exclusively? Did the top 4 not have huge profit growth and fit comfortably into your narrative? There's also the accounting profits that may occur due to something other than simple operations, for example, if the company bought long-term fuel futures, they may have been taking an accounting loss every quarter until oil prices blew up, and now that same contract, a result of financial engineering, delivers massive profit all at once.
- irjustin 3y ago> Did the top 4 not have hug e profit growth and fit comfortably into your narrative? https://accountable.us/report-top-5-shipping-companies-saw-profits-spike-by-over-40b-after-raising-their-rates-in-2021/ https://accountable.us/report-top-5-shipping-companies-saw-p... "Fits your narrative" is a relatively aggressive position to take against such a comment.
- noduerme 3y agoIsn't this just a sign that the Fed's tamping-down of inflation is working?
- mberning 3y agoTheir plan to curtail inflation has always been demand destruction. Which means callous layoffs, unemployment, and misery for the workforce. We are just now seeing the effects, so expect it to get worse from here. We are a few more earnings misses, fumble of the debt ceiling, and another bank collapse away from a depression.
- jbm 3y agoWhy a depression and not simply a recession?
- Grimburger 3y ago> callous layoffs, unemployment, and misery for the workforce US unemployment is hovering around 50 years lows. Probably better to look at the actual stats rather than listen to the constant doom-peddling that comes from the media. https://tradingeconomics.com/united-states/unemployment-rate https://tradingeconomics.com/united-states/unemployment-rate
- stonogo 3y agoUS labor force participation rate is also at historic lows. A low unemployment rate only considers the active labor force. There aren't as many people working as a fraction of population as you think. Doom peddling and stats can line up. https://www.macrotrends.net/countries/USA/united-states/labor-force-participation-rate https://www.macrotrends.net/countries/USA/united-states/labo...
- Grimburger 3y agoAn ageing population means that participation rate is always trending downwards. People get strange about unemployment figures and how they are determined but the methodology hasn't changed in decades.
- nologic01 3y agoThe shock of the onset and "anti"-shock of the fizzling of the pandemic must be the most dramatic economic experiment for some time. Its like throwing a stone in a stagnant pond and watching the waves go up and down. Except the economic fluid is far more complex, full of lags and hysteresis. E.g. shipping rates have gone down but not the costs (indicated as fuel and labor). Why not? Nobody wants to leave a crisis go to waste (i.e. groups of people will try to maximize and make their monetary gains permanent) but there are restoring forces towards the underlying equilibrium supply and demand balances.
- Culonavirus 3y agoSpeaking of economic fluid, here's a fun fact: Value of assets on the balance sheet of the Federal Reserve in 2007: 0.9 trillion Value of assets on the balance sheet of the Federal Reserve in 2022: 9 trillion
- gambiting 3y agoI don't really understand what this implies?
- nologic01 3y agoRefers to excess liquidity (which may have played a role in inflation but may also have saved the day from the deepest depression) The anti-liquidists (also gold bugs or digital gold bugs) never came to terms with the fact that the human economy - like the human body - is mostly made out of water. There is a goldilocks hydration level but its not a simple thing to identify as there are countless other complex things going on.
- atomicnumber3 3y agoIt's a combination of the federal reserve both having bought lots of assets and also made a lot of money on the assets it's holding. It's a bit weird. The federal reserve made money on the assets it held in the 2008 crisis. (Buy low, sell high!)
- JimmyRuska 3y agoJust need that small last gust of wind for an updraft in initial claims, and the AI bubble pops
- xbmcuser 3y agoShipping companies were giving 8-10 month salary bonuses last year because of the price boom they were enjoying. The supply and demand disruptions created a unique situation for them and now I think price are going back to normal.
- cozzyd 3y ago[flagged]
- Sparkyte 3y agoIt isn't very efficienct honestly. It is better to produce a lot of the little components ship those and then complete assembly at the destination. One it ensures jobs, two is prevents cargo from getting stuck in places. Source production is not only more energy efficient but also a great way to increase profits in certain territories. Also it will balance much of the economy internationally.
- renewiltord 3y agoLMAO https://www.statista.com/statistics/1266618/china-eastern-asia-to-north-american-west-coast-container-freight-rates/ https://www.statista.com/statistics/1266618/china-eastern-as... Literally business back to normal dude. Stop wasting our time. Embarrassing from the WSJ.
- shmde 3y agoWon't someone think of the poor C suite executives.
- deleted 3y ago[deleted]
- tomcam 3y agoGuessing a huge part of the reason is that Western firms are pulling out of China bigly. Chinese manufacturing and exports are an underreported crisis, both down apparently in the double digits.
- sacnoradhq 3y agoOverexpansion of productive capacity (OXPC) by Tragedy of the Commons and irrational exuberance. Gold rush competition sets in motion future contractive collapses. Be not quite the first in, almost first out, and scuttle inventory before the floor falls out.
- nickff 3y agoIs this comment intended to be a series of barely-relevant cliches? This isn't a 'tragedy of the commons', wasn't a 'gold rush', and none of the competitors were 'first in' or 'first out'.
- eru 3y ago> Overexpansion of productive capacity (OXPC) [...] > Gold rush competition sets in motion future contractive collapses. Are you implying that entrepreneurs are idiots who can't anticipate the future that any goldbug and Internet-Austrian obviously can see?
- Broken_Hippo 3y agohttps://archive.is/KPKNR https://archive.is/KPKNR
- Animats 3y agoWhat's the current price to move a container from Shenzhen to LA?
- seymore_12 3y agoExcellent question to which there is no easy answer. There is no site available that can give a price for which you are sufficiently sure you are getting competitive rate for which the shipment will be actually performed in the time needed. None. Closest you can get is inquire via some of the ocean carriers, 4PL sites, but you have to do this carrier by carrier and yet often you don't get comprehensive number. Pricing in this industry is extremely opaque, indices quoted here are for the most part rough estimations, representing someone's hopes and dreams.
- Animats 3y agoHuh. There's a YC startup, "Flexport", which was supposed to disrupt that. Their pitch: "Flexport is the end-to-end platform for global trade. Book, track and deliver freight shipments from factory floor to customer door." But if you go to their site, you don't see a price list. You get "Hi there ! Click here for a quote or to chat with sales." Same as other freight forwarders.
- deleted 3y ago[deleted]
- threetoadsloth 3y agohttps://www.econdb.com/maritime/summary/ https://www.econdb.com/maritime/summary/ Related indicators showing certainly a slowdown. Prices did crash but not quantities.
- Avalaxy 3y agoWeird that all the consumer prices went up because shipping was so expensive, but that they now aren't going down...
- wazoox 3y agoCry me a river. CMA-CGM has made 40 billion € of profit in the past three years. I suppose Maersk and other large shipping companies are on the same boat (uh uh).
- mschuster91 3y ago> CMA-CGM has made 40 billion € of profit in the past three years. And it seems like they didn't do the responsible thing and set it aside in a rainy-day fund, but instead they and their competitors went on a shopping spree. Honestly, the way things have went in the past, I'd say a maximum of three years before the first one whines and calls for government subsidies.
- sixstringtheory 3y agoWhat'd they purchase? It's arguably better for some of that money to continue circulating in the economy vs being parked in investments and savings that essentially create money out of nothing, accruing interest or profiting from speculation. Of course it does make sense to do that with a portion, perhaps, but I wouldn't say "all". And I do share your disdain with government bailouts.
- mschuster91 3y ago> What'd they purchase? Quite a lot (and barely anything of that is mentioned in Wikipedia): - 2023: Bollore Logistic, 5 billion € / https://www.dvz.de/rubriken/logistik/detail/news/cma-cgm-gibt-uebernahmeangebot-fuer-bollore-logistics-ab.html https://www.dvz.de/rubriken/logistik/detail/news/cma-cgm-gib... - 2022: GEFCO, .5 billion € / https://trans.info/de/cma-cgm-logistiker-284312 https://trans.info/de/cma-cgm-logistiker-284312 - 2022: Spedag Interfreight, unknown price / https://trans.info/de/cma-cgm-ceva-logistik-296514 https://trans.info/de/cma-cgm-ceva-logistik-296514 - 2022: Colis Prive, unknown price / https://www.dvz.de/rubriken/see/detail/news/cma-cgm-investiert-in-die-letzte-meile.html https://www.dvz.de/rubriken/see/detail/news/cma-cgm-investie... - 2022: 9% of Air France KLM, .25 billion dollars / https://simpleflying.com/air-france-klm-cma-cgm-partnership/ https://simpleflying.com/air-france-klm-cma-cgm-partnership/ - 2021: Ingram Micro, 3 billion dollars / https://www.dvz.de/rubriken/see/detail/news/cma-cgm-kauft-kontraktlogistiker-ingram-micro.html https://www.dvz.de/rubriken/see/detail/news/cma-cgm-kauft-ko... And their competition hasn't been sleeping either, there has been a wave of consolidation and acquisitions.
- flagrant_taco 3y agoHopefully this means process for used containers will come back down as well, they've been crazy expensive the last few years.
- elzbardico 3y ago[flagged]
- nvusuvu 3y agoWhich policies are you referring to?
- rossdavidh 3y agoSo, "Container shipping has cratered..." is a lot different in tone than the actual article headline's "Ocean Freight Rates Slump..." It's a big shift from 2021, sure, but nobody is surprised by that. It is a slump from 2019, rather than "cratering".
- ChoGGi 3y agoHope they saved the rip off profits for the monsoon. (I'd say rainy day but...)