Packed Containers Piling Up At Asian Ports Because There's Too Much Demand From West

The Business Insider ^ | 3-30-2010 | Vincent Fernando

[blam]

Packed Containers Piling Up At Asian Ports Because There's Too Much Demand From West

Vincent Fernando, CFA
Mar. 30, 2010, 6:16 AM

Packed containers are piling up at Asian ports as strong demand from the U.S. and Europe causes a lack of supply of ships. Shipping companies had purposefully idled capacity during the economic downturn, then started to bring it back recently.

Yet they didn't do it fast enough to keep up with the robust pick-up in demand from the West.

[snip]

[ken21]

why can’t u.s. manufacturers employ

robotic technologies

to recapture american manufacturing?

it would save huge transportation costs.

[Diana in Wisconsin]

Us, too, FRiend! You and I are SO lucky to live in two of the BLUEST and most CLUELESS counties in our state! Grrrr!

Dane County is in terrible fiscal shape. Our unemployment has DOUBLED in the past year...of course, nary a whisper of it around the Capitol Square or in the local media. *SPIT*

[Diana in Wisconsin]

Not QUITE as funny as when Teddy was alive, but still funny...

[Nickname]

Please don’t give them any ideas. Kids in a candy shop comes to mind.

[milwguy]

Actually I just WORK in Milwaukee. At the end of the day I escape to Ozaukee Cty, one of the reddest counties in the state. There I try to recapture my sanity and reflect on the continuing diasaster which is Milwaukee.

[Diana in Wisconsin]

I don’t leave the county; I work in Madistan, but head back to the farm at the end of the day. :)

And you’re right...it is the ONLY way to keep from going postal on any given day, LOL!

(I grew up in West Allis. Dad got us out of there in 1970, bless his heart!)

[wbill]

1 Trillion Dollars buys a lot of cheap plastic Chinese crap.

When that runs out, though....

Of course, Uncle Sam can crank up the presses and print another trillion.....

[wbill]

The problem is that too many shipping lines mothballed vessels

Would it stand to reason that they mothballed the oldest, slowest, least efficient, etc etc etc?

I dunno, just asking. That's how I'd do it.

[Last Dakotan]

Massive trade deficits weren’t sustainable before this recession - they won’t be sustainable afterward.

[Vigilanteman]

Of course, less efficient vessels get mothballed first. My point is that shipping companies are more concerned with keeping an artificial shortage so they can keep their capacity tight and their rates up than they are with clearing backlog and serving their customers.

It is sort of like denying a small town the services of what might be a reasonably good GP doctor because he or she is not a competent brain surgeon.

[Lazamataz]

Could you, could!

[10Ring]

It's just a headline by a blogger. He linked to a Bloomberg article titled "U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships". Makes a bit more sense, right?

Re: Mil Cty taxes...just because bureaucrats counted on 3% tax growth ad infinitum, doesn't mean it would come true. They were acting like home flippers who thought housing prices never went down. Now, they just don't want a crisis to go to waste.

[wbill]

Absolutely, I'm not disagreeing with you - I was just wondering how the companies went about the process.

I'd imagine that end-of-year shipping is starting to ramp up around now. Certainly, Back-to-school garments + supplies must be in transit. Its concerning, to me, that shippers are not ramping up capacity accordingly.

From a logistical standpoint, the more efficient ships would, ultimately, be cheaper to run. Predictably and perversely, any artificial backlog that was created would, I'd think, take longer to clear. "We can keep ships A, B and C running as is, and clear the log in 4 months..... or .... we can spend X millions of dollars to bring ships Y and Z back online, and clear the same backlog in 3 months. Why spend the extra money?"

I'd also think that if the shipping companies are looking at this as a temporary "blip" in production, there would be even less incentive to bring more shipping online. I'm sure there are costs involved to re-mothball ships.

Of course, you're right in that the customers are taking it right in the shorts, but that's a whole other discussion.

Your anecdote was incredibly valuable. Thanks for sharing.

[algernonpj]

If there is this huge spike in ‘DEMAND’ how come sales tax collections are still going DOWN? I look at sales tax collections as one of the best indicators of economic activity because the gov’t can’t fudge the numbers.

They have every incentive to collect every dime of sales tax owed to them, and the fact that collections are down this year vs 09 (when 09 was a dreadful year!) is very troubling.

Gov’t can massage the jobs numbers, the GDP numbers, etc., but the local tax collection numbers are not subject to such hijinks and they show me that any increase in demand is iluusory./

Very interesting point, consistent with 1 in 5 being unemployed/underemployed and many who still have jobs either getting no raises or getting salary cuts.

[ansel12]

I just ordered a 69 cent credit card type, flat, magnifying glass from Hong Kong, with free shipping.

Before that I ordered some High Precision Anti-static Stainless Steel Curved Tips Tweezers (Black) from China for 39 cents with free shipping.

I’m helping to keep the ships sailing.

[Vince Ferrer]

Port traffic in Long Beach has been up substantially this year:

Port of Long Beach