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Container shipping has cratered, as ship owners try to avoid unprofitable trips

wsj.com

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Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#51

Post by chii »

mberning wrote: post #31
listenallyall wrote: post #27

Earlier quoted context omitted.

Sure, 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-20... . Discretionary spending on travel is through the roof. https://www.mastercardservices.com/en/reports-insights/econo...

You 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…

> 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.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#52

Post by eru »

nologic01 wrote: post #24

The 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…

> 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?

It's much weirder. Economics is even fuller of anti-lags, ie clever economic actors are constantly planning for the future and anticipating. Eg if the Fed announces today, that they are going to run the printing presses red-hot next year, you'd already see inflation starting now.

That anticipation is why stock prices started to recover when we were still in the very middle of the pandemic. Contrary to popular opinion, investors are rather long sighted and forward looking. (They just don't always believe managers when they say 'trust me bro, our long term plan might lose money now, but it's totally gonna pay off anytime soon'; and that's why they demand regular quarterly profits from run-of-the-mill management, but let Bezos run Amazon for decades without anything in the way of dividends.)

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#53

Post by sacnoradhq »

Overexpansion 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.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#54

Post by nickff »

sacnoradhq wrote: post #53

Overexpansion 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.

Is 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'.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#55

Post by SargeDebian »

swyx wrote: post #19
dalyons wrote: post #6

That’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?

i checked the BDI https://tradingeconomics.com/commodity/baltic its exactly at the historical 30 year average. nothing to see here lol

Not saying that the article's framing is correct, but being at the 30y average does sound like a bad situation for shipping companies - they must have had some rising costs.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#56

Post by bandrami »

glup wrote: post #39
somethoughts wrote: post #32

Earlier quoted context omitted.

Definitely feels like there should be a "law of headlines" coined to effect of - something must always either be surging catastrophically or plummeting disatrously.

And 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?”

It'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.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#57

Post by eru »

Culonavirus wrote: post #28
nologic01 wrote: post #24

The 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…

Speaking 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

Interest on excess reserves explains much of that change.

In the olden days of 2007, banks would only hold as many reserves at the Fed as they legally needed. They would instead invest any extra (or make their deposits less attractive, so that they have fewer excess reserves).

In 2008 the Fed started paying interest on reserves above the legally minimum (so called excess reserves).

Excess reserves parked at the Fed don't contribute to the economy, but are still counted in the Fed balance sheet.

You can see on https://fred.stlouisfed.org/graph/?g=15mr6 how the level of reserves at the Fed shot from about 0.050 trillion USD in 2007 to about 3 trillion USD today.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#58

Post by conductr »

tomcam wrote: post #45

Guessing 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.

The supply chain internally there has fallen victim to their government’s response of Covid. And, the fact the labor can be at parity with Mexico in many cases now. I’ve been doubling down on Mexico manufacturing to avoid most of the delays.

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#59

Post by eru »

sacnoradhq wrote: post #53

Overexpansion 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.

> 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?

Re: Container shipping has cratered, as ship owners try to avoid unprofitable trips

#60

Post by visarga »

nologic01 wrote: post #24

The 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…

> Except the economic fluid is far more complex, full of lags and hysteresis.

You mean it is learning? Hysteresis is "local learning".

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