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56 cargo ships are currently at anchor in the ports of Los Angeles and Long Beach. This includes a record of 44 container ships, circumventing the infamous record of 40 set in February 2021. This is the lead up to the US Christmas sales season, when retailers are desperately trying to top up their stocks, which are running low on many categories, including apparel. Green dots are cargo ships, red dots are tankers The US $ 4 trillion that the Fed has printed and thrown on the financial markets is fed up, is spending money on goods and is on the way to historic spikes.
Since the production of many consumer goods has been outsourced from Corporate America, from Apple to Zappos to low-wage countries, this stuff has to be imported.
There are now some signs that consumer demand for goods may retreat just a bit from its historic peak. However, this could be due to a combination of factors including retailers out of stock on some items. Numerous retailers have complained about this, including clothing stores like Nordstrom.
Despite an apparent loss of upward momentum in recent months, sales have remained at an amazingly high level:
Now is the high season leading up to the Christmas sales season, and so are the ports are congested, the stations are clogged with containers, the shippers are complaining of a driver shortage in the trucking industry, the warehouses are full, everyone is complaining about the labor shortage, and containers get stuck, tangled and diverted.
Everyone A container that is lying on a ship that is anchored and waiting for a berth, or that is stuck somewhere in a train station or port, is a container that another shipper with goods ready for dispatch cannot get their hands on. And there is a mad scramble going on to only get empty containers.
The congestion of the ports in Asia does not help. On August 11, China shut down the newly built container terminal in the port of Ningbo-Zhoushan, China’s second largest port after Shanghai, and things immediately got much worse. Container ships rerouted ships and informed customers of long delays because other ports could not handle the additional ships either.
The container terminal in Ningbo resumed operations three days ago. But the congestion of containers in the port, on ships, at China’s freight forwarders and railways and the resulting chaos in the shipping world will possibly disrupt the flow of containers and goods for weeks.
In the port of Los Angeles, imports of loaded containers increased first seven months to July of this year compared to the same period in the record year 2019 by 20% to 3.3 million TEU (twenty-foot equivalent units, a standard measure in the industry). ):
The average rate to move a 40-foot container from Shanghai to Los Angeles increased in the week ending on the 26.
The average rate to ship a 40-foot container from Shanghai to New York rose to $ 14,136 per 40-foot container during the week.
Drewry’s composite index, or global container rates, jumped to a new record of $ 9,818 per 40-foot container. The index was well below $ 2,000 before the pandemic.
Prices for shipping containers in the other direction have also increased, but from a much lower level: from Los Angeles to Shanghai, the average rate increased in the Year-on-year up 170% to $ 1,398 per 40-foot container, said Drewry.
When you talk to people who need to ship containers to the US or from the US to Asia, you will hear a litany of stories about ” Containers from Hell ”that were hung up somewhere, then diverted, and then hung elsewhere. and finally came way behind schedule, and after endless hours of trying to get everything right.
And they complain about sky-high rates that far exceed Drewry’s averages here. It is lamented that after sailing through very rough waters in 2015 and 2016, container carriers have consolidated too much, and now the few remaining large carriers are just doing what they want, asking for what they want, and getting away with it to add to the endless frustration of shippers. And these senders then have to find a way to pass the additional costs on to their customers. And that happens too.
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Christmas is just around the corner and retailers now have to stock up. That explains the blocked shipping channels.
Could the backlog, chaos and bottleneck of this port congestion be due to a specific and simple phenomenon?
“The average rate for shipping a 40-foot container from Shanghai to New York rose during the week $ 14,136 per 40-foot container. “
Forgive my ignorance, but should this massive increase in shipping costs be viewed as inflationary as the costs have to be passed on? And although it may be temporary?
Yes, we paid these costs without objection. They are well passed on. Maybe with a little delay, as it takes a while for the socks in the container to be charged from my credit card.
I’ve heard of Russian addiction camps for alcoholics. Doctors give the alcoholic excessive amounts of vodka that they cannot handle and recognize the toxicity of alcohol and give up drinking altogether. Maybe we are in a financially Russian addiction center. Give people too much money to buy too much. You will buy so many things for a while. How much would someone process? People will eventually give up and become minimalists.
I’ve been a minimalist for a couple of decades. Everything new comes into the house, leave two things. I get the warm and fuzzies selling stuff on craigslist. Why buy new? I can get great used things all the time, especially furniture. All wood. Almost everyone I know has the same mindset. Shrink and reuse, recycle
And best of all: zero debt. American, I guess.
Notable is the amount of compressed sawdust dung from Ikea that people put up for sale week after week. Why would someone buy this and then expect someone to pay for it second-hand or even take it away for free?
Funny when people think of B.S. Name for “selling Malm bed!” the exclamation mark is always a sign of their delusions. Even better when they announce: “Paid X thousands for it!” Which only shows what kind of suckers they are.
However, good American stuff is being given away all the time. Better to grab it and store it when you have space than to put it in a dumpster.
Just bought a solid oak from 1948 from Craigslist
Library chair in perfect condition for $ 45
Delivered to your home here in the Midwest (WI)
Pay lazy, stupid Americans to sit on the couch, get high, and buy shit, and they will – and that’s the bottom line. The “Make China Great Again” plan by .gov and the FED was a complete success. Now we have anchored a number of containers with future plastic waste off the coast. Oh joy …
The way the US economy is doing, we should have a pandemic more often!
Many OECD economies are facing similar booms for similar reasons. But as in many things, the US seems better than most.
If you had asked at the start of the pandemic which country gives the most money and the most generous welfare benefits, most people would not have thought it was the US .
I said that too last year. Who would have thought that pandemics were the way to economic prosperity?
If there is just one new virus, Powell will print 9 trillion more and we will all get rich. MMT will come into play and everyone will be happy !!!
Pay more, get less. Durable goods spending after inflation declined 10% from historical high. But services rose sharply, indicating the next source of inflation.
His “taper” discussion – tapering begins this year – caught all the attention, but his focus was on inflation.
The an additional $ 300 a week in federal unemployment benefits, on top of state unemployment benefits, should give people enough money to pay the rent.
Rising house prices have become a sensitive political issue for the Korean government as it is facing frustrated and angry middle class.