Are you feeling it, yet? - Freight Industry Fiasco

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Shawnda H
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#1 Post by Shawnda H »

International freight costs are currently 7+ times what I've seen in my 11 years of importing The Wine Check, not to mention the months long delays. Background: Because all the raw materials come from Asia, the only way we could enter the market as a product that competes with shipping, versus expensive novelty wine luggage, was to manufacture overseas. Our goal was to increase wine sales for the wineries by making wine transport more affordable and put the wine world on wheels for tourists and all wine lovers. We hand selected our factory in Indonesia for its fair business practices as well as EOCA, BlueSign, ISO 901/14001/45001 certifications.

I'm curious if anyone in the industry has felt this with glass, wine barrels etc. If not, it's just a matter of time. You can research the vast-problem on your own, but many experts and analysts are saying the only thing that will correct it is inflation.

I don't profess to have all the answers but I wrote our congressman as well as the Small Business Association proposing my thoughts on a stop-gap solution which involved using government ports and resources. If you're interested, I'll share the details under separate cover via private message.

This is also affecting my herbal company as those vendors, too, are struggling with massive cost increases and delays. It will effect everyone, save the Home Depots of the world who've bought their own freight ships. More towards killing small business and feeding the machine.
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#2 Post by John Morris »

The Home Depots of the world aren't immune. There are shortages of lots of things. (I haven't been able to find large latex dish gloves for a couple of months!) (FYI, Home Depot didn't buy any ships. It chartered one ship, which I suspect can transport only a fraction of everything HD buys from Asia.)

I don't see how the government can help. It's a matter of ship capacity at the end of the day.
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#3 Post by Shawnda H »

John Morris wrote: September 9th, 2021, 7:24 pm The Home Depots of the world aren't immune. There are shortages of lots of things. (I haven't been able to find large latex dish gloves for a couple of months!) (FYI, Home Depot didn't buy any ships. It chartered one ship, which I suspect can transport only a fraction of everything HD buys from Asia.)

I don't see how the government can help. It's a matter of ship capacity at the end of the day.
We have government ships, we have government ports. I think we could put them to use. Or we can just wait for inflation which at this point seems inevitable. And as I read, Home Depot does have its own ship. https://www.freightwaves.com/news/home- ... inous-sign however supply is certainly still an issue, too.
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#4 Post by D@vid Bu3ker »

How many cargo ships do you think the government has?

At best it’s a drop in the bucket. A small drop.
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#5 Post by Nathan Smyth »

Shawnda H wrote: September 9th, 2021, 7:11 pm International freight costs are currently 7+ times what I've seen in my 11 years of importing The Wine Check, not to mention the months long delays. Background: Because all the raw materials come from Asia, the only way we could enter the market as a product that competes with shipping, versus expensive novelty wine luggage, was to manufacture overseas.
So we're to conclude that the cheapest United States labor is still "7+ times" more expensive than Uighur slave labor?

It must royally suck to be an Uighur slave.

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#6 Post by Andrew K. »

Shawnda H wrote: September 9th, 2021, 7:11 pm the only thing that will correct it is inflation.
You're paying 7x for shipping. Isn't that the definition of inflation? What will paying 20x fix?
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#7 Post by Ramon C »

Inflation at work.

My good friend whose business imports perishables from Asia paid, pre-pandemic, under $3k per container to ship his goods. Today he pays $25K+ per container.

He’s a b-2-b.

It’s eaten beyond his margin and he has no recourse but to pass it on with increased pricing.
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#8 Post by Eric Z. »

My father depends on goods from Asia. Its a few issues - you had the issue in the Suez and you had a major port in China close for a few weeks because of COVID. Furthermore docks around the world - like any other business - are having trouble hiring people (especially here in the US). From reports my dad gets - the biggest issue in his supply chain are the US Docks out in CA - containers are just sitting at the port. The ports do not have the labor or area to open/process the shipments fast enough. Companies willing to pay more money can get premium access to their containers to be opened sooner. The docks see it as a 1 time phenomena until they are caught up and have no interest in finding ways to increase their output potential. And once the cargo is opened and processed, there is a shortage of truckers here in the United States, gas prices are high for them, etc.

https://www.cnn.com/2021/08/23/business ... index.html

Question is - if things settle back down, will companies bring their prices back down? Doubtful.
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#9 Post by Sarah Kirschbaum »

Ramon C wrote: September 10th, 2021, 3:51 am Inflation at work.

My good friend whose business imports perishables from Asia paid, pre-pandemic, under $3k per container to ship his goods. Today he pays $25K+ per container.

He’s a b-2-b.

It’s eaten beyond his margin and he has no recourse but to pass it on with increased pricing.
This is precisely the situation we are in importing sake from Japan, and our margins were slim to start.
Sort of ITB - my husband imports a small amount of sake and I help out

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#10 Post by Adam Frisch »

Glass bottles completely sold out in most molds. Many wines I can not bottle for my fall release right now. Most of the stock won't be in until maybe Dec, so hopefully in time for BerserkerDay, but who knows?
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#11 Post by Lonnie F. »

Eric Z. wrote: September 10th, 2021, 4:19 am My father depends on goods from Asia. Its a few issues - you had the issue in the Suez and you had a major port in China close for a few weeks because of COVID. Furthermore docks around the world - like any other business - are having trouble hiring people (especially here in the US). From reports my dad gets - the biggest issue in his supply chain are the US Docks out in CA - containers are just sitting at the port. The ports do not have the labor or area to open/process the shipments fast enough. Companies willing to pay more money can get premium access to their containers to be opened sooner. The docks see it as a 1 time phenomena until they are caught up and have no interest in finding ways to increase their output potential. And once the cargo is opened and processed, there is a shortage of truckers here in the United States, gas prices are high for them, etc.

https://www.cnn.com/2021/08/23/business ... index.html

Question is - if things settle back down, will companies bring their prices back down? Doubtful.
I think many of the supply chain prices will eventually come down as demand comes down. I don't think we'll see another $3 trillion infusion of cash into US purchasing power in 1 year. It's going to take time for that amount of money to work it's way through the global economy though.
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#12 Post by Markus S »

Isn't this simply the "Invisible Hand" working it's glove-like magic?
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#13 Post by John Morris »

Shawnda H wrote: September 9th, 2021, 7:33 pm
John Morris wrote: September 9th, 2021, 7:24 pm The Home Depots of the world aren't immune. There are shortages of lots of things. (I haven't been able to find large latex dish gloves for a couple of months!) (FYI, Home Depot didn't buy any ships. It chartered one ship, which I suspect can transport only a fraction of everything HD buys from Asia.)

I don't see how the government can help. It's a matter of ship capacity at the end of the day.
We have government ships, we have government ports. I think we could put them to use. Or we can just wait for inflation which at this point seems inevitable. And as I read, Home Depot does have its own ship. https://www.freightwaves.com/news/home- ... inous-sign however supply is certainly still an issue, too.
How many 1,000-foot-long container ships does the US government own? I'd guess none.

The large container ports are owned by government entities (e.g., port authorities), and those are the ones that are backed up. The US Navy's ports are tiny by comparison.
Last edited by John Morris on September 10th, 2021, 5:54 am, edited 1 time in total.
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#14 Post by John Morris »

Markus S wrote: September 10th, 2021, 5:44 am Isn't this simply the "Invisible Hand" working it's glove-like magic?
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#15 Post by Jeff_M. »

I manufacture with steel for my job. Steel has more than tripled since August 2020. Inflation is already here and is only going to get worse. High gas prices have raised the cost of bringing goods to market and also increased the cost of those goods that we all pay for. Wood cost increases added onto all this with most everything shipping on wooden pallets means again we pay more.

I have been shipping product overseas via air freight and bypassing sea freight when possible.

http://steelbenchmarker.com/history.pdf
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#16 Post by John Morris »

The question is how much of that is due to temporary disruptions. And it's just not clear.

I assume the spike in US-produced steel shown on the charts you linked to reflects mill slowdowns because of Covid and shipping delays for foreign steel, both reducing supply.

Lumber prices did go wild over the past year for similar reasons (production declines because of Covid, increased demand as building spiked), but they have been falling steeply in recent months, according to Fed figures (see the chart below). That shows how the market can correct after a disruption.

Gas prices are up the last couple of weeks because refineries on the Gulf are shut down because of Ida damage and power outages. That's always a volatile commodity, affected by supply outages. Those prices will come back down.

The point is that spikes aren't that unusual. The question is whether the prices return to baseline levels. We'll see.
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#17 Post by Jeff_M. »

John Morris wrote: September 10th, 2021, 7:21 am The question is how much of that is due to temporary disruptions. And it's just not clear.

I assume the spike in US-produced steel shown on the charts you linked to reflects mill slowdowns because of Covid and shipping delays for foreign steel, both reducing supply.

Lumber prices did go wild over the past year for similar reasons (production declines because of Covid, increased demand as building spiked), but they have been falling steeply in recent months, according to Fed figures (see the chart below). That shows how the market can correct after a disruption.

Gas prices are up the last couple of weeks because refineries on the Gulf are shut down because of Ida damage and power outages. That's always a volatile commodity, affected by supply outages. Those prices will come back down.

The point is that spikes aren't that unusual. The question is whether the prices return to baseline levels. We'll see.
Steel is at an all time high and continues to go up in price. This goes well beyond unusual. We saw price spikes in 2008 and again in 2018 due to Section 232 tariffs. When the mines shut down last year, and the mills went offline and stopped producing, they couldn't just ramp up enough to catch up to demand. US steel mills can not product enough capacity to cover the demand domestically. We are reliant on imported steel and from what I'm told most countries are protecting their steel from export to take care of home first.

Just got a 21% wood price increase late last month too. Wood is still struggling with high costs.
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#18 Post by John Morris »

Jeff_M. wrote: September 10th, 2021, 7:25 am When the mines shut down last year, and the mills went offline and stopped producing, they couldn't just ramp up enough to catch up to demand. US steel mills can not product enough capacity to cover the demand domestically. We are reliant on imported steel and from what I'm told most countries are protecting their steel from export to take care of home first.
You're right -- steel prices haven't turned back down (see the chart below). But all of the factors you cited -- except tariffs -- are temporary. That was my point. Domestic mines and mills will reopen and when the shipping backlog clears, foreign imports will rebound. The question is when. When they do, the market will rebalance and prices will likely fall, as they have for lumber.

I don't know whether any countries restrict steel exports. To the contrary, many countries restrict imports to protect their own steel industries. Which means that steel customers pay more.
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#19 Post by Shawnda H »

D@vid Bu3ker wrote: September 9th, 2021, 11:51 pm How many cargo ships do you think the government has?

At best it’s a drop in the bucket. A small drop.
even if one, that's between 10,000 TEU to 21,000 TEUs or likely ~20,000 containers. That's a lot of small businesses that could be helped, in my opinion.
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#20 Post by Shawnda H »

Adam Frisch wrote: September 10th, 2021, 5:12 am Glass bottles completely sold out in most molds. Many wines I can not bottle for my fall release right now. Most of the stock won't be in until maybe Dec, so hopefully in time for BerserkerDay, but who knows?
Our container which was supposed to sail July 26, "MIGHT" have a sail date at the end of this month and just heard this morning there's ANOTHER $3000 congestion fee. This 40' HQ container which we was previously around $4,000 to move will be over $27,000, as of today, barring any further surcharges or GRIs.
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#21 Post by Shawnda H »

Nathan Smyth wrote: September 10th, 2021, 3:01 am
Shawnda H wrote: September 9th, 2021, 7:11 pm International freight costs are currently 7+ times what I've seen in my 11 years of importing The Wine Check, not to mention the months long delays. Background: Because all the raw materials come from Asia, the only way we could enter the market as a product that competes with shipping, versus expensive novelty wine luggage, was to manufacture overseas.
So we're to conclude that the cheapest United States labor is still "7+ times" more expensive than Uighur slave labor?

It must royally suck to be an Uighur slave.

[Coming soon to a locality near you, if our "Elites" have any say in the matter.]
Our Indonesian factory employs fair business practices along with meeting green standards (noted in my post). We'd LOVE to manufacture locally but here's the problem (beyond labor), the raw goods come from Asia. We provide a service/product helping people travel with wine and lowering the carbon footprint while buying more wine domestically and abroad.

People will keep drinking, bottles will ship albeit more expensively. Distributors will decide for the majority of the market what they'll drink. Will be interesting to see how DTC for wine will change for the smaller producers without large marketing budgets and who are struggling to just get glass. Thankful that WB provides a platform for them but many who drink wine aren't "forum-types". Frankly, I'm not. But this subject matter is important to our industry. Here I am, hoping the wise will help find solutions.
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#22 Post by lleichtman »

Sarah Kirschbaum wrote: September 10th, 2021, 4:40 am
Ramon C wrote: September 10th, 2021, 3:51 am Inflation at work.

My good friend whose business imports perishables from Asia paid, pre-pandemic, under $3k per container to ship his goods. Today he pays $25K+ per container.

He’s a b-2-b.

It’s eaten beyond his margin and he has no recourse but to pass it on with increased pricing.
This is precisely the situation we are in importing sake from Japan, and our margins were slim to start.
We had a large Sake shipment held up for nearly two months due to container ships from China not moving.
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#23 Post by D@vid Bu3ker »

Shawnda H wrote: September 10th, 2021, 8:30 am
D@vid Bu3ker wrote: September 9th, 2021, 11:51 pm How many cargo ships do you think the government has?

At best it’s a drop in the bucket. A small drop.
even if one, that's between 10,000 TEU to 21,000 TEUs or likely ~20,000 containers. That's a lot of small businesses that could be helped, in my opinion.
Which businesses? How is that determined.

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#24 Post by John Morris »

There are about 6,000 container ships at sea on any given day. One more ain't going to help, except for whoever is a government favorite.
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#25 Post by John Morris »

Today I learned... that an unusual number of containers have gone overboard in the last year:
3,000 Shipping Containers Fell Into the Pacific Ocean Last Winter

If only John Fox had had this article to cite!

The best parts:
In remote waters 1,600 miles northwest of Hawai‘i, the container stack lashed to the ship’s deck collapsed, tossing more than 1,800 containers into the sea. Some of those containers carried dangerous goods, including batteries, fireworks and liquid ethanol.
To date, the only debris known to come ashore from this winter’s accidents are giant waterlogged sacks of chia seeds, which hit Oregon beaches in December following the loss of six containers from a ship near the California coast. Federal biologists were still cleaning smelly globs of the seeds from threatened snowy plover nesting habitat in April.
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#26 Post by Shawnda H »

D@vid Bu3ker wrote: September 10th, 2021, 9:31 am
Shawnda H wrote: September 10th, 2021, 8:30 am
D@vid Bu3ker wrote: September 9th, 2021, 11:51 pm How many cargo ships do you think the government has?

At best it’s a drop in the bucket. A small drop.
even if one, that's between 10,000 TEU to 21,000 TEUs or likely ~20,000 containers. That's a lot of small businesses that could be helped, in my opinion.
Which businesses? How is that determined.

It’s a nice dream, but it’s just that, a dream.
Answers and innovation start that way. I'm not saying it would fix everything, but small business as defined by SBA is how I see it with the smallest being first served. A reverse Berlin Airlift of sorts. Maybe it's unrealistic, but maintaining a small business in this climate is far more unrealistic. Mostly, I'm open to ideas. Inviting them. Hoping. I'd rather do what I can to change an outcome than extrapolate the dismal data as it presents today. It's one of my more annoying (to some) qualities. Ask Todd French.
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#27 Post by Shawnda H »

John Morris wrote: September 10th, 2021, 9:56 am There are about 6,000 container ships at sea on any given day. One more ain't going to help, except for whoever is a government favorite.
Now that's a good question. Who does the government favor? Not turning this into a political post, rather a logistical one looking for solutions. However it's my belief that decreasing the divide and providing equal opportunity for small business should be favored/prioritized. Walking away from an opportunity to help even a small percentage - those most at risk - makes the least amount of sense to me.

Seriously, I'm looking for answers. If I believed I had them all I wouldn't have posted.
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#28 Post by D@vid Bu3ker »

I certainly get wanting ideas, but there are factors that would immediately come into play that are not allowed in Wine Talk discussions.
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#29 Post by Mike Cohen »

It's certainly frustrating and in many cases these issues threaten people's businesses and personal finances.

It's relatively minor in the scheme of things, but while driving down to the Jersey Shore, my daughter got rear-ended on the highway. Everyone was okay, but my car sustained about $5k of damage. Forgetting all the delays with insurance and getting a police report, the biggest issue is waiting on parts. Currently my car is being repaired but they are waiting on several parts including a muffler and these parts have no ETA.

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#30 Post by Taylor Broussard »

As John has alluded to, it's still too early to determine whether this is actual inflation and not just transitory supply constraints. The disruption from Covid, especially across Asia has obviously been significant. I know that prior to Covid-19 dry cargo shipping was flagging in profitability (possibly just cyclical) - but nonetheless, this is somewhat to be expected when manufacturing and market disruptions are created from a literal global pandemic. There's a limited amount of ships, with long lead times from manufacturing and I'm sure like other industries, there's not a real race to sink large investment into new fleets when the market in one to two years when they'd be delivered is anything but certain. (I'd guess that a lot of fleets are holding off on decommissioning vessels where possible though).

Given demand, borrowing costs and other liquidity in the market there will likely be continued constraints for the near future. We work with a number of housing developers in CA - and many are trying to take advantage of the market before the window closes (many are anticipating some type of down cycle in 2+ years). In the meantime, many are willing and able to pass on some portion of higher cost to consumers. Even in the face of supply constraints, many businesses can't afford to miss out on any window of profitability.

Is all of that real inflation? We don't know yet. So much of our supply chain was built on a model of efficiency that limits of oversupply wherever possible because it all increases costs. (including vessels on the water, large quantities of inventory, etc). We're seeing the downside of that now since we're trying to fit into 12+ months of demand into a much, much smaller delivery window and there simply isn't enough slack to accommodate to the greater demand.

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#31 Post by Shawnda H »

Taylor Broussard wrote: September 10th, 2021, 10:52 am As John has alluded to, it's still too early to determine whether this is actual inflation and not just transitory supply constraints. The disruption from Covid, especially across Asia has obviously been significant. I know that prior to Covid-19 dry cargo shipping was flagging in profitability (possibly just cyclical) - but nonetheless, this is somewhat to be expected when manufacturing and market disruptions are created from a literal global pandemic. There's a limited amount of ships, with long lead times from manufacturing and I'm sure like other industries, there's not a real race to sink large investment into new fleets when the market in one to two years when they'd be delivered is anything but certain. (I'd guess that a lot of fleets are holding off on decommissioning vessels where possible though).

Given demand, borrowing costs and other liquidity in the market there will likely be continued constraints for the near future. We work with a number of housing developers in CA - and many are trying to take advantage of the market before the window closes (many are anticipating some type of down cycle in 2+ years). In the meantime, many are willing and able to pass on some portion of higher cost to consumers. Even in the face of supply constraints, many businesses can't afford to miss out on any window of profitability.

Is all of that real inflation? We don't know yet. So much of our supply chain was built on a model of efficiency that limits of oversupply wherever possible because it all increases costs. (including vessels on the water, large quantities of inventory, etc). We're seeing the downside of that now since we're trying to fit into 12+ months of demand into a much, much smaller delivery window and there simply isn't enough slack to accommodate to the greater demand.
Well noted, agreed and understood. However with the major freight lines buying up the smaller ones I suspect the lack of competition could prevent rates coming back to "normal"/manageable. Further with smaller businesses not able to sustain this peak, there, too, competition is diminished. It all feels very unhealthy (Covid pun somewhat intended).
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#32 Post by ChrisJames »

Mike Cohen wrote: September 10th, 2021, 10:28 am It's certainly frustrating and in many cases these issues threaten people's businesses and personal finances.

It's relatively minor in the scheme of things, but while driving down to the Jersey Shore, my daughter got rear-ended on the highway. Everyone was okay, but my car sustained about $5k of damage. Forgetting all the delays with insurance and getting a police report, the biggest issue is waiting on parts. Currently my car is being repaired but they are waiting on several parts including a muffler and these parts have no ETA.
That stinks. I got rear-ended in April. No one was injured, but my 2015 Honda was totaled. With 53K miles, I was going to keep driving it for years to come. Instead I got $12k from the insurance company. Try buying a car now new or used for $12k. So I get to putz around in my old truck.

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#33 Post by David Cohen »

A few friends who work in varying capacities with the US Gov't have expressed similar reasons for the freight issues:
1) cargo ships used to wait up to a few day before unloading in the US, wait is now a few weeks due to covid distancing/shortage of workers/staggered wrok times for dock workers/etc
2) cargo ships come from Asia with containers full and typically left here with empty containers. Because of unload wait times, limited time for ships in port to make room for backlog of ships waiting often cargo ships leave port with no empty containers heading back to Asia
3) ports in Asia have goods waiting but no containers to fill and no ships to put them on as they are tied up around the US.

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#34 Post by Josh Grossman »

Mike Cohen wrote: September 10th, 2021, 10:28 am It's certainly frustrating and in many cases these issues threaten people's businesses and personal finances.

It's relatively minor in the scheme of things, but while driving down to the Jersey Shore, my daughter got rear-ended on the highway. Everyone was okay, but my car sustained about $5k of damage. Forgetting all the delays with insurance and getting a police report, the biggest issue is waiting on parts. Currently my car is being repaired but they are waiting on several parts including a muffler and these parts have no ETA.
I got crushed into a wall by a person that didn't see me and merged into me on my way back from Rehoboth in August. Just got a new car yesterday. Not a good time to be shopping for used cars either. Luckily I was in a Volvo--so no injuries.

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#35 Post by Shawnda H »

John Morris wrote: September 10th, 2021, 5:50 am The large container ports are owned by government entities (e.g., port authorities), and those are the ones that are backed up. The US Navy's ports are tiny by comparison.
You might find it shocking but 2/3rds of our ports are Chinese owned. While our ports are US regulated, they are not government owned.
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#36 Post by brigcampbell »

Jeff_M. wrote: September 10th, 2021, 7:02 am I manufacture with steel for my job. Steel has more than tripled since August 2020. Inflation is already here and is only going to get worse. High gas prices have raised the cost of bringing goods to market and also increased the cost of those goods that we all pay for. Wood cost increases added onto all this with most everything shipping on wooden pallets means again we pay more.

I have been shipping product overseas via air freight and bypassing sea freight when possible.

http://steelbenchmarker.com/history.pdf
Feeling you. We import very high quality Austrian steel.

It's painful right now and will continue through the rest of the year. Hopefully 2022 will head towards the new normal.
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#37 Post by brigcampbell »

Shawnda H wrote: September 10th, 2021, 1:57 pm
John Morris wrote: September 10th, 2021, 5:50 am The large container ports are owned by government entities (e.g., port authorities), and those are the ones that are backed up. The US Navy's ports are tiny by comparison.
You might find it shocking but 2/3rds of our ports are Chinese owned. While our ports are US regulated, they are not government owned.
Which commerical ports on the west coast are Chinese owned?
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#38 Post by John Morris »

The answer, Brig, is none, so far as I can tell.

The five largest US ports and their operators are:

Los Angeles- Los Angeles Board of Harbor Commissioners
Long Beach- Long Beach Harbor Department, City of Long Beach
New York and New Jersey- Port Authority of NY and NJ (bi-state authority)
Georgia Ports (Savannah and Brunswick)- Georgia Ports Authority
Seattle-Tacoma- Northwest Seaport Alliance, a government development authority

COSCO and other Chinese shipping companies have minority stakes in some terminals at some ports. But that's a long way from owning or controlling the ports.
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#39 Post by Taylor Broussard »

From a recent WSJ article: https://www.wsj.com/articles/u-s-ports- ... 1630843202
Leaders of some of the busiest U.S. ports expect congestion snarling maritime gateways to continue deep into next year, as the crush of goods from manufacturers and retailers looking to replenish depleted inventories pushes past shipping’s usual seasonal lulls.

Ports are already swamped by record numbers of containers reaching U.S. shores during this year’s peak shipping season, and the number of vessels waiting for berth space at Southern California’s gateways is growing as logjams stretch into warehouses and distribution networks across the country.

Port leaders, such as Mario Cordero, executive director at the Port of Long Beach, Calif., who have spoken with shipping lines and their cargo customers say the slowdown in container volumes that usually coincides with the Lunar New Year in February, when factories in China typically shut down, is unlikely to offer much relief.

“I don’t see substantial mitigation with regard to the congestion that the major container ports are experiencing,” Mr. Cordero said. “Many people believe it’s going to continue through the summer of 2022.”

Griff Lynch, executive director of the Georgia Ports Authority, which operates one of the nation’s largest ocean gateways at the Port of Savannah, said: “We think at least midway through 2022 or the entire 2022 could be very strong.”

Major U.S. ports were forecast to handle the equivalent of some 2.37 million imported containers in August, according to the Global Port Tracker report produced by Hackett Associates for the National Retail Federation. The figure is the most for any month in records dating to 2002, and NRF projects overall inbound volumes for the year will reach 25.9 million containers, measured in 20-foot equivalent units. That would break the record of 22 million boxes in 2020.

Ports have emerged as one of many bottlenecks in global supply chains as ships fill up with boxes carrying electronics, home furnishings, holiday decorations and other goods.

Hundreds of thousands of containers are stuck aboard container ships waiting for a berth or stacked up at terminals waiting to be moved by truck or rail to inland terminals, warehouses and distribution centers. When the boxes do move, they are often snarled at congested freight rail yards and warehouses that are full to capacity.

Bob Biesterfield, chief executive of C.H. Robinson Worldwide Inc. the largest freight broker in North America, said shortages of truck drivers and warehouse workers are making shipping delays worse as the need to replenish inventories is at an all-time high. “I don’t think that’s something that just gets fixed in the next four to five months in accordance with the Lunar New Year,” he said.

The congestion has contributed to a world-wide shortage of shipping containers and to spiraling costs for ocean freight. The logjam prompted the Biden administration to appoint a ports envoy last month to address how to improve cargo movement following complaints from U.S. businesses facing inventory shortages, shipping delays and rising costs.

Congestion has been worst at the neighboring ports of Los Angeles and Long Beach, which account for more than a third of all U.S. seaborne imports. Forty or more ships have been waiting at anchor off the coast there on any given day in recent weeks, according to the Marine Exchange of Southern California, a pandemic-era record. Before the pandemic, a single ship at anchor was unusual.

Gene Seroka, executive director of the Port of Los Angeles, said the oceanside congestion could worsen as the peak holiday-shipping season continues. The port has broken container-handling records for 13 consecutive months. Mr. Seroka said terminals expect to handle 35% more inbound containers the week beginning Sep. 5 and 80% more inbound containers the following week compared with the same periods last year.

The surge is being driven by Americans shifting their spending away from services, such as restaurants and vacations, to home improvements, office equipment and other consumer goods. Port leaders say importers are also stocking up on additional inventory after the shortcomings of just-in-time supply chains were exposed in the early weeks of the pandemic.

Sam Ruda, port director at the Port Authority of New York and New Jersey, said the logjams may only break when the Covid-19 pandemic winds down. “That’s really what will inform the duration of what we are seeing on the ground today,” he said.
Certainly a multitude of factors - but at the end of the day, even under non-Covid circumstances or labor issues, record levels of shipping are creating major constraints. I think the good news is that these things do often tend to alleviate as time goes on but likely not without some more pain in next few/several months. With a lot of retailers looking to get product on the shelf in time for the holidays, you have to think that a rush to get product on the water is inducing more pain too. (much like runs on gas, toilet paper and other market disruptions we've seen lately).

It's certainly unfortunate for all being impacted by these disruptions, and right now it's incredibly widespread. But even if there were more ships on the water, or air cargo - I'm sure distribution through rail and trucks would be just as backed up. Quite literally the entire global supply chain is in a massive traffic jam.
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#40 Post by brigcampbell »

John Morris wrote: September 10th, 2021, 2:16 pm The answer, Brig, is none, so far as I can tell.

The five largest US ports and their operators are:

Los Angeles- Los Angeles Board of Harbor Commissioners
Long Beach- Long Beach Harbor Department, City of Long Beach
New York and New Jersey- Port Authority of NY and NJ (bi-state authority)
Georgia Ports (Savannah and Brunswick)- Georgia Ports Authority
Seattle-Tacoma- Northwest Seaport Alliance, a government development authority

COSCO and other Chinese shipping companies have minority stakes in some terminals at some ports. But that's a long way from owning or controlling the ports.
Shocking. LOL

She probably should stop posting in this thread. The hole is wide and deep.
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#41 Post by Shawnda H »

brigcampbell wrote: September 10th, 2021, 2:23 pm
John Morris wrote: September 10th, 2021, 2:16 pm The answer, Brig, is none, so far as I can tell.

The five largest US ports and their operators are:

Los Angeles- Los Angeles Board of Harbor Commissioners
Long Beach- Long Beach Harbor Department, City of Long Beach
New York and New Jersey- Port Authority of NY and NJ (bi-state authority)
Georgia Ports (Savannah and Brunswick)- Georgia Ports Authority
Seattle-Tacoma- Northwest Seaport Alliance, a government development authority

COSCO and other Chinese shipping companies have minority stakes in some terminals at some ports. But that's a long way from owning or controlling the ports.
Shocking. LOL

She probably should stop posting in this thread. The hole is wide and deep.
Governing and owning are separate things. I am not a port authority. I am a small business owner. However note this as one of many references. Yes, I should have stated "stakes." I would call them high stakes. https://digital-commons.usnwc.edu/cgi/v ... nwc-review Regardless, if I'm the "she" you are referring to, I will not stop posting, nor will I stop working to save my businesses and helping other small business owners. That is the purpose of this thread. What is yours?
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#42 Post by Alan Rath »

Shawnda H wrote: September 10th, 2021, 10:14 am
John Morris wrote: September 10th, 2021, 9:56 am There are about 6,000 container ships at sea on any given day. One more ain't going to help, except for whoever is a government favorite.
Now that's a good question. Who does the government favor? Not turning this into a political post, rather a logistical one looking for solutions. However it's my belief that decreasing the divide and providing equal opportunity for small business should be favored/prioritized. Walking away from an opportunity to help even a small percentage - those most at risk - makes the least amount of sense to me.

Seriously, I'm looking for answers. If I believed I had them all I wouldn't have posted.
Really basic economics will tell you that getting the government involved in any significant way is NOT going to solve the shipping problem. No one wants shipping to be gummed up, least of all the shipping companies. There is no grand solution, other than getting out of the pandemic, which should bring things back to normal (or at least a new normal, but I would expect that to be much closer to the old normal than what we have today).

If anything, the lesson we should learn from the past year is how efficiently markets work, but also how precarious they are. The best solution is to get back to a point where markets can work again. With that goal, the best thing wealthy nations could do is to produce and distribute vaccines as quickly as possible, all around the world. It’s a rare confluence of maximizing profit while doing good.
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#43 Post by John Morris »

Shawnda H wrote: September 10th, 2021, 2:41 pm
brigcampbell wrote: September 10th, 2021, 2:23 pm She probably should stop posting in this thread. The hole is wide and deep.
Governing and owning are separate things. I am not a port authority. I am a small business owner. However note this as one of many references. Yes, I should have stated "stakes." I would call them high stakes. https://digital-commons.usnwc.edu/cgi/v ... nwc-review Regardless, if I'm the "she" you are referring to, I will not stop posting, nor will I stop working to save my businesses and helping other small business owners. That is the purpose of this thread. What is yours?
I certainly don't want to drive you off here, and I'm sympathetic to the plight of business owners hurt by the supply chain disruptions. There are wine importers who've had containers sitting on ships offshore for extended periods, potentially cooking their wine.

But there are a lot of knowledgeable Berserkers who share their knowledge and correct misconceptions. It's one of the great values of the board. David Buecker is involved in importing, for example. I'm a financial journalist, so I follow the business world, and I've been fascinated by the various dimensions of the supply chain disruption and have read as much as I could about it. I've also been trained to look up and check facts (as I did with the ports). So, as you've discovered, if you post misinformation here, you can pretty much count on someone to call you out on it.

So, no matter how sympathetic I and others may be, we care about the facts, and it's just a mistake to think (a) that the US government is in any position to solve the shipping problems, which involve a massive shortage of ships for the backlog of goods, or (b) that the Chinese control our ports.
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#44 Post by Tom G l a s g o w »

John Morris wrote: September 10th, 2021, 6:42 pm
Shawnda H wrote: September 10th, 2021, 2:41 pm
brigcampbell wrote: September 10th, 2021, 2:23 pm She probably should stop posting in this thread. The hole is wide and deep.
Governing and owning are separate things. I am not a port authority. I am a small business owner. However note this as one of many references. Yes, I should have stated "stakes." I would call them high stakes. https://digital-commons.usnwc.edu/cgi/v ... nwc-review Regardless, if I'm the "she" you are referring to, I will not stop posting, nor will I stop working to save my businesses and helping other small business owners. That is the purpose of this thread. What is yours?
I certainly don't want to drive you off here, and I'm sympathetic to the plight of business owners hurt by the supply chain disruptions. There are wine importers who've had containers sitting on ships offshore for extended periods, potentially cooking their wine.

But there are a lot of knowledgeable Berserkers who share their knowledge and correct misconceptions. It's one of the great values of the board. David Buecker is involved in importing, for example. I'm a financial journalist, so I follow the business world, and I've been fascinated by the various dimensions of the supply chain disruption and have read as much as I could about it. I've also been trained to look up and check facts (as I did with the ports). So, as you've discovered, if you post misinformation here, you can pretty much count on someone to call you out on it.

So, no matter how sympathetic I and others may be, we care about the facts, and it's just a mistake to think (a) that the US government is in any position to solve the shipping problems, which involve a massive shortage of ships for the backlog of goods, or (b) that the Chinese control our ports.
Seems like the Chinese have significant interests in port operations in the US and around the world.

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#45 Post by Dan Kravitz »

I am also affected, but apparently by much less than many. I don't have the numbers in front of me and am no longer involved in the day-to-day issues of transport, but over the past year our containers of bottled wine have been delayed by about 1 - 4 months and I believe costs have almost doubled. That's survivable for us.
The tariffs were much worse; I am in the process of selling my business and since tariffs were first mentioned (2/19), the value of my business has halved, along with the money I will have available when I fully retire in 2+ years.

I don't think the government can do anything about this. If they should if they could is a whole other topic.

Of course the Big Boys are far better positioned to endure this kind of disruption, but it's always been that way. Small businesses like mine need to be flexible, nimble and paranoid to survive. This is Year 37 for Hand Picked Selections.

Nothing posted here says to me that there is any foreign control over our ports. I would strongly prefer that there be laws prohibiting any foreign entities from holding controlling stakes in any American port. Are there any such laws? I feel safe in stating that Emperor Xi does not wish America well.

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#46 Post by John Morris »

They have or were seeking control of some ports in Australia, but that became a political hot potato, as I recall, and I think the government nixed it.

As I explained above, they have minority stakes in some US terminals within ports, but it's one thing to have a dock, some cranes and a warehouse and another thing to control a whole port. I believe the US government blocked a Chinese company from operating a former navy dock facility that was being converted to civilian use.

If anyone knows of a whole port in the US that is under Chinese control, I'd be curious to hear about it. Seriously!
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#47 Post by John Morris »

Dan Kravitz wrote: September 10th, 2021, 7:04 pm Nothing posted here says to me that there is any foreign control over our ports. I would strongly prefer that there be laws prohibiting any foreign entities from holding controlling stakes in any American port. Are there any such laws? I feel safe in stating that Emperor Xi does not wish America well.
There's CFIUS, "an interagency committee authorized to review certain transactions involving foreign investment in the United States" for national security issues. It has blocked many deals, or raised so many questions that the buyers (often Chinese) backed away.
https://home.treasury.gov/policy-issues ... ates-cfius
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#48 Post by Shawnda H »

https://www.freightwaves.com/news/exper ... t-us-ports
This, too, is an interesting read including map of the world and their interests. https://digital-commons.usnwc.edu/cgi/v ... nwc-review
I personally hate the freight industry but I'm clearly angry and admittedly have a short fuse for anything threatening my good business(es). As Dan stated, needing to be flexible, nimble and paranoid are necessary for small business. There will however be casualties, especially "non essential" businesses already and otherwise hurt by Covid. Navigating Covid with a business that depends on air travel and tourism has been a tremendous challenge. But I. just. don't. quit. Further, I'm not going to fall down a rabbit-hole of internet sleuthing of the freight industry.

Maybe my idea is ridiculous, sometimes great things come from that place.
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#49 Post by Sean S y d n e y »

I've only felt it at the very end of the supply chain, but trying to re-stock my wine list has been incredibly difficult; the shipments of most agencies I work with are at minimum 6 weeks behind and there are delays at every step of the way. Lots of scrambling to fill holes.
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Re: Are you feeling it, yet? - Freight Industry Fiasco

#50 Post by Dan Kravitz »

John Morris wrote: September 10th, 2021, 7:12 pm
Dan Kravitz wrote: September 10th, 2021, 7:04 pm Nothing posted here says to me that there is any foreign control over our ports. I would strongly prefer that there be laws prohibiting any foreign entities from holding controlling stakes in any American port. Are there any such laws? I feel safe in stating that Emperor Xi does not wish America well.
There's CFIUS, "an interagency committee authorized to review certain transactions involving foreign investment in the United States" for national security issues. It has blocked many deals, or raised so many questions that the buyers (often Chinese) backed away.
https://home.treasury.gov/policy-issues ... ates-cfius
I'm aware of CFIUS and know that they vet foreign investments for potential problems. But I would hope there are some hard and fast laws about who may own what. The idea that this is simply in the hands of a relatively obscure panel, on a case-by-case basis, does not make me comfortable.

Dan Kravitz
swillmaster - ITB

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