Retailers Pay More to Get Cargo (No Guarantee)

[Roland99]

Retailers Pay More to Get Cargo (No Guarantee)
http://www.nytimes.com/2010/07/27/business/global/27shipping.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fbusiness%2Feconomy%2Findex.jsonp

Fighting for freight, retailers are outbidding each other to score scarce cargo space on ships, paying two to three times last year’s freight rates — in some cases, the highest rates in five years. And still, many are getting merchandise weeks late.

The problems stem from 2009, when stores slashed inventory. With little demand for shipping, ocean carriers took ships out of service: more than 11 percent of the global shipping fleet was idle in spring 2009, according to AXS-Alphaliner, an industry consultant.

Carriers also moved to “slow steaming,” traveling at slower and more fuel-efficient speeds, while the companies producing containers, the typically 20- or 40-foot boxes in which most consumer companies ship goods, essentially stopped making them.

...

(While container shipping has recovered from last year’s lower spot prices, commodity shipping, where companies ship raw goods like iron ore or petroleum, remains in a depression. This month, the Baltic Dry Index, which measures commodity shipping costs, fell for the longest number of consecutive days in almost nine years because of low demand for materials like steel.)

How long before consumers start seeing some inflation in retail goods?

[rfranklin]

1. They could strap it to the backs of the 20 cents-a-day workers and...

have them swim it over after they make it.

[dmallind]

2. but nobody's buying anything and we're doomed to a depression

so what's being shipped and who is it being sold to?

[Statistical]

3. Maybe that means people ARE buying something?

and we aren't doomed to a depression.

[dmallind]

4. Ya know that might just be true......NT

[jtuck004]

5. Certainly they are. Coke's reports say their profits are coming

from sales overseas. UPS, another rated BUY, says their deliveries are down in the U.S., but strong in the world outside the U.S.

We are in a globalized economy, and if we can't compete outside our borders, we may still be in a deflationary cycle.

Based on how we have been eating our seed corn for the past 30 years, it is difficult to see how we compete.

Whether anyone calls it a depression is just semantics.