Expect a rise in cost of off-shore products

[historicalarms]

The cost of hobby machines & tooling can expect a hit in shipping cost that might just make new stuff prohibitively expensive to a lot of folks.
This is a snippet of postings on another forum I visit every day. I cant help but wonder if John Conroy's new mill is the last one to hit N. A. soil without a $2000 shipping surcharge.


Container Shipping Cost

I have just learned that a 40 foot container coming from China to the west coast of North America used to take about 25 days to arrive in port. A couple of years ago the cost was about $1800-$2000 US. Now that time to arrive is uncertain but the cost has spiraled to about $20,000 US...about a ten fold increase. Considering that the average value of goods inside a container average about $50,000 to $100,00 US the shipping expense of the goods will have a dramatic increase in the end cost of those goods. I don't know if the shipping costs across the Atlantic Ocean have gone up as much. So get ready for larger than expected costs on guns and ammo crossing the Pacific.​

....​

let's just say if you are looking to buy something big and you can find it, don't wait because the cost increases on that stuff is going to be epic. In my industry we are seeing cost increases of 30+% to the retailer on their costs...just to be in the ballpark of where we were before in terms of profit margin.

The shipping companies are also playing bidding games and cancelling "bookings" because you booked your container at a lower rate and someone else is willing to pay more. So, you lose your sailing or agree to the "extortion". We had one last week which was a $3400 container last year get quoted at a spot price of $35,000 CDN.

...Different business then you, but I heard the same story of containers coming from south korea. North american shipping has also almost double I would caution anybody that needs any goods, being, car, tractor, gun, electronics, etc if yoy can, just get it now!

....Supply lines are collapsing everywhere . There are ports and cities without power right now in China . There are cities that go dark with no street lights and it's every man for himself at intersections as there are no traffic lights either . Industries are shutting down because they have no power . Not all China but the eastern and south eastern coasts . I just tried to buy 3 culverts locally and the culvert store doesn't have any . The biggest galvanized culvert manufacturer in North America is in Quebec and they have shut down and laid 400 workers off because their steel and galvanizing compound comes from China and it's not coming . Go look at your local Kabota dealer . Almost nothing so buy what's on the lot right now as nothing is coming either . They are taking orders with a 12 month delivery date but no promises on that Supply lines are collapsing everywhere . There are ports and cities without power right now in China . There are cities that go dark with no street lights and it's every man for himself at intersections as there are no traffic lights either . Industries are shutting down because they have no power . Not all China but the eastern and south eastern coasts . I just tried to buy 3 culverts locally and the culvert store doesn't have any . The biggest galvanized culvert manufacturer in North America is in Quebec and they have shut down and laid 400 workers off because their steel and galvanizing compound comes from China and it's not coming . Go look at your local Kabota dealer . Almost nothing so buy what's on the lot right now as nothing is coming either . They are taking orders with a 12 month delivery date but no promises on that . Land Pride , one of the biggest agricultural machine manufacturers has tightened to the American market only as they are just about out of steel . The local dealer had a dozen bush hogs in the spring but can no longer get any . Land Pride , one of the biggest agricultural machine manufacturers has tightened to the American market only as they are just about out of steel . The local dealer had a dozen bush hogs in the spring but can no longer get any

 

[historicalarms]

There is a lot of underhand stuff going on. I have been told by several of our suppliers that they are having to pay bribes of $25,000+ just to get on the list to get their goods on a ship. This is causing a lot of shortages and the small guys are being squeezed out by people like Walmart, Costco and Canadian Tire who have the financial clout to stay at the front of the queue. This also contributes to the rise in prices.

 

[historicalarms]

Container ships now piling up at anchorages off China’s ports
More signs that trans-Pacific liner capacity has overwhelmed port capacity
Friday, September 24, 2021

There are over 60 container ships full of import cargo stuck offshore of Los Angeles and Long Beach, but there are more than double that — 154 as of Friday — waiting to load export cargo off Shanghai and Ningbo in China, according to eeSea, a company that analyzes carrier schedules.

The number of container ships anchored off Shanghai and Ningbo has surged over recent weeks. There are now 242 container ships waiting for berths countrywide.

Whether it’s due to heavy export volumes, Typhoon Chanthu or COVID, rising congestion in China is yet another wild card for the trans-Pacific trade.

Congestion in Chinese ports that slows the flow of exports is bad news for U.S. importers but it could temporarily alleviate pressure on the ports of Los Angeles and Long Beach.

When operations at the Chinese port of Yantian were heavily curtailed by a COVID outbreak in June, ships at anchor in California’s San Pedro Bay declined. The problem for California ports was that the temporary reprieve was soon followed by a surge of delayed cargo.

“The devil in these things is the whiplash effects,” Simon Sundboell, founder of eeSea, told American Shipper. “What you’d rather have is more stability, not these swings, and I think what everybody fears is that the swings will become even more volatile. When the system is already this stretched, all of these unexpected events can be a causal factor in congestion.”

Ships follow the money

A major driver of congestion on both sides of the Pacific Ocean: Landside capacity (terminals, trucking, rail, warehousing) is limited, but the vessel capacity of a single ocean trade lane is highly flexible.

While the number of ships in the world is finite, operators can shift ships to wherever they make the most money. And the trans-Pacific is now a particularly lucrative trade: Spot rates including premiums can top $20,000 per forty-foot equivalent unit (FEU).

“These assets [ships] are super-mobile,” said Sundboell. “What’s happening now is the opposite of what dogged the industry for the past 20 years. Five years ago, people were asking: How can the trans-Pacific rate drop from $2,000 to $1,500 [per FEU] in the space of just six days? It was because you could take a vessel from one place and sail it someplace else, and suddenly there were more ships and a price war and rates dropped.

“Now we’re seeing the opposite,” he said. As ship operators pile more capacity into the trans-Pacific, congestion rises, delays mount, the incentive for shippers to pay premiums is supported, and all-in rates remain at record highs.
Surging number of services

According to eeSea, the number of Far East-West Coast services has surged from 48 in January to 67 this month. In contrast, the number of services on this lane stayed fairly steady last year, at 42-46.


In addition, ships are being drawn from other trades to serve as “extra loaders” (ships that perform one-off voyages). In some cases, multiple ad hoc ships are doing multiple round trips — a hybrid of an extra loader and a scheduled service.

“We’re definitely seeing carriers pulling ships from Asia-Middle East and Asia-Africa and putting them into the trans-Pacific trade,” said Sundboell.

“Whether it’s for one round trip as an extra loader or whether it becomes semipermanent, I don’t even think the carriers know themselves right now. They’re just playing the market and if it makes more economic sense to take a ship from the Middle East and put it in the trans-Pacific, they’ll do it, whether it’s for one month, three months or six months — which is why nobody knows what this network is going to look like six months from now.

“The line managers in Copenhagen and Geneva and Marseille are looking at yields per container and costs per container. And not just per container. They’re looking at it per day, and per container-TEU [twenty-foot equivalent per]-mile.”
Trans-Pacific ships getting smaller

Yet another driver of increased trans-Pacific congestion: There are not only more ships, but the ships are getting smaller, meaning that more vessels are needed to carry the same TEUs.

According to eeSea, the average capacity of ships serving Asia-West Coast services was 8,601 TEUs in January and is 7,125 TEUs currently, a decrease of 17%.

American Shipper recently analyzed the average size of vessels at anchorage or drifting off Southern California currently versus the Q1 anchorage peak on Feb. 1 and found a similar drop: from 8,060 TEUs to 6,184 TEUs, or 24%.

Smaller average vessel size “would definitely slow things down further,” said Sundboell.

Some operators have added trans-Pacific capacity by buying ships in the secondhand market or leasing them in the charter market. Most of the ships available for purchase or charter in 2021 have been in smaller size categories.

Liner companies’ switching of capacity from other trades is also pulling down average size, because the trades being cannibalized use lower-capacity ships. “The reason you have smaller vessels coming in is that they’re taking them from the Middle East and Africa trades,” said Sundboell.

How does this end?

Ship operators can put as many ships as they want into the trans-Pacific to chase record spot rates, leaving other trades short. But ultimately, the imbalance should self-correct.

“It becomes something that balances itself out,” explained Sundboell, noting that if ships are removed from other trades, rates in those trades would rise to the point where it would entice ships back.

“At a certain point, the rates of the trades you’re leaving increase too much or the cost of having the ships sitting at anchor becomes too much [in terms of lost future cargo],” said Sundboell.

In Q1, when anchorages filled off Los Angeles/Long Beach, carriers were unable to get enough ships back to Asia in time to load cargo, so they had to “blank” (cancel) a large number of sailings, which reduced congestion in Q2.

Given the extreme anchorage situations both off China and Southern California, a repeat of the blank-sailing scenario seems likely in Q4 – a worrisome prospect for importers.
Lack of visibility

But even companies like eeSea that track blank sailings cannot definitely say what will happen in Q4.

In the first half of 2020, when carriers were blanking sailings due to lockdown-induced demand drops, they announced voyage cancellations months in advance, providing an important signal to the market. This year, there is far less notice, because blank sailings are being caused by congestion, not lower forward demand.

According to Sundboell, “For November, there are only eight blank sailings [on Asia-West Coast] and only three in December, but that is just because the carriers have not communicated them yet. We only put a blank sailing into our system when it is confirmed by the carrier.”

Pre-COVID, he said, carriers believed they were tied down by long notice periods for service changes. “But corona gave them a platform to take out capacity with short notice,” said Sundboell. “Now they’re trying to get more capacity in, but they’ve definitely taken the liberty of being both more volatile with their capacity and with the ‘forecasting’ of their service.

“And I think that’s what’s causing the frustration among the BCOs [beneficial cargo owners; the shippers]. A BCO hates having to be forced to get used to the fact that the vessel is always 10 days late — or that they won’t even know when it’s coming. I don’t think that’s what the carriers are aiming to do, but they’ve certainly found wiggle room to change services on short notice that they’ve never had before.”


Just how many containers of cargo are stuck off California’s coast?
Record shattered: 73 container ships stuck waiting off California

Greg Miller, Senior Editor

 

[Doggggboy]

Well, crap. With regards to the culvert thing, this summer they tore out on old wooden bridge on Hwy 33 southeast of Regina between Kronau and Lajord and were replacing it with 3 big culverts. A stop light was put up on each side and traffic is rerouted through the ditch since mid July, each side taking turns. About a 7 weeks ago somebody hotwired the big Cat articulated dump truck they were using and drove it on to the culverts, collapsing one of them. It is special ordered from down east and we will be going through the ditch until we get another one. Gonna be fun in the winter.

 

[historicalarms]

I had the exact same scenario happen on a construction site 40 yrs ago, local farm boys got a bit drunk one night, fired up one of our D8's and smashed 1/2 dozen galvanized culverts down to flat scrap.

I supervised the construction & burial of the largest multi plate culvert the Ab gov. had ever installed to date (mid1990's). 378 ft long, 20 ft high & 15 ft wide. (3 semi-trailer loads of nut & bolts alone in it)....lots of stress on that job & we had security guards at both ends of that thing every night so no one messed with it or equipment.

 

[Dusty]

After the Suez mishap with the Ever-Given running aground and the money that was paid out by insurance companies I'm not really surprised by shipping costs going up. It's all relative and someone has to pay meaning we consumers. Besides that the pandemic has driven world prices up right across the board, visit your local grocery store, box store, or gas pumps.

All this has and will drive the price of used machine up and we've seen that happening of late. Just saying!

 

[Dusty]

Well, crap. With regards to the culvert thing, this summer they tore out on old wooden bridge on Hwy 33 southeast of Regina between Kronau and Lajord and were replacing it with 3 big culverts. A stop light was put up on each side and traffic is rerouted through the ditch since mid July, each side taking turns. About a 7 weeks ago somebody hotwired the big Cat articulated dump truck they were using and drove it on to the culverts, collapsing one of them. It is special ordered from down east and we will be going through the ditch until we get another one. Gonna be fun in the winter.

And here I thought driving in the ditches was the norm in SK. Devil made me say that. LOL

 

[Chicken lights]

Maybe this will start a swing back towards North American manufacturing again. But that won’t happen overnight. In large part cheap shipping costs was what made it feasible to exploit the cheap labour markets overseas, you’d think then logically if overseas shipping is very expensive it no longer is an option.

 

[Dusty]

Maybe this will start a swing back towards North American manufacturing again. But that won’t happen overnight. In large part cheap shipping costs was what made it feasible to exploit the cheap labour markets overseas, you’d think then logically if overseas shipping is very expensive it no longer is an option.

And you're right about that, it's all boils down to greed and the gold.

 

[Doggggboy]

And here I thought driving in the ditches was the norm in SK. Devil made me say that. LOL

Hold my beer.....

 

[Doggggboy]

When my dad was teaching me how to drive on the farm we would be going down the grid and he would reach over and yank the wheel towards the ditch. My job was to get safely back out of the ditch. You know, just in case.....

 

[Dusty]

When my dad was teaching me how to drive on the farm we would be going down the grid and he would reach over and yank the wheel towards the ditch. My job was to get safely back out of the ditch. You know, just in case.....

With my knee replacement surgeries plus medications I've not been allowed a single grandpa's pop or wee sip of Scottish nectar (single malt) for some time something like 34 months. Enjoy yours while you can doggggboy, wish I was there. LOL

Yup there a trick to getting a vehicle back onto gravel road, perhaps yours wasn't graveled. Glad you learned the lesson safely.

 

[combustable herbage]

When I was young we used to drive around all sorts of "department of holidays: machinery but it wasn't our fault they left the keys in the most obvious places usually took about 20 seconds to find them. We never damaged anything we just tried it out and usually put it back in the same place I am sure nobody ever noticed.

 

[Janger]

Metallurgical coal my employer sells for $150/ton last year now it’s $500/ton. It’s used to make steel of course. You need 1/2 ton of coal per ton of steel.

 

[John Conroy]

The mill I got from PM is now priced $1000 USD higher due to increases in shipping costs

 

[historicalarms]

And here I thought driving in the ditches was the norm in SK. Devil made me say that. LOL

Even after 2-3 million KM of gravel truck haul road driving in Ab., I have never been on a road rougher and in worse shape than Hi 15 from Kenaston over to Raymore. SK....the ditch was a lot better on the majority.

 

[kevin.decelles]

@historicalarms - you should try HWY 8 south between Langenburg SK and Moosomin SK........ . It's like it is built on cheez-whiz.

I don't go home often, but when I do I have to phone ahead to figure out which roads are 'ok' for standard suspension.

 

[Tom O]

Metallurgical coal my employer sells for $150/ton last year now it’s $500/ton. It’s used to make steel of course. You need 1/2 ton of coal per ton of steel.

Who’s your employer does he have smaller sacks of coal available or coal dust that is mixed in green sand for casting iron?

 

[Proxule]

"So get ready for larger than expected costs on guns and ammo crossing the Pacific."

Buy it cheap and stack it deep, is what I been living by for many years
I remember those silvertip czecks for 120 a crate...... LOL

I think most companies will eat a bit of the profit margin and / raise the prices a bit.
Thanks for the info!

 

[DPittman]

With my knee replacement surgeries plus medications I've not been allowed a single grandpa's pop or wee sip of Scottish nectar (single malt) for some time something like 34 months. Enjoy yours while you can doggggboy, wish I was there. LOL

I think I'd change doctors.