Shipping has ground to a snail’s pace and shipping prices are exploding…and oddly enough, companies that own the ships are making record profits. I find it almost bizarre to hear all the explanations for this…none of them comprehensive in nature, some outright lies, and most are simply agenda driven. Well, today I throw myself into the matter.
Well, actually I have been doing research for the last 3 months on this issue…but today I share a bunch of facts and my thoughts with you.
The entire shipping chain (notice I didn’t say “supply chain”) is flawed…almost by design strangely enough.
Economies of scale simply stated…the more units of something you handle the lower the costs per unit can become. But, there are inherent flaws in that concept…vulnerability to disruption due to concentration of the units, becoming more advanced in unit handling than other members of the supply chain, and worst of all…the power of control.
Container ships are much, much larger than a decade or two ago…as much as 10 – 15 times larger. The largest of which can carry 24,000 20’ containers! So that should make each container cheaper to handle/move across the ocean for the ship owner according to economies of scale. However, we find the costs for the shipper going through the roof. Notice that the container ship owner is NOT the same as the shipper. The shipper is the company who arranges every aspect of moving goods from manufacturing plant to the retailer or a wholesale distributor. The ship owner only owns one leg of the chain…the ship.
Because ships can now handle many more times the containers it means:
- More time finding a full ship-load of full containers which means more port of calls in Asia and more time at docks being loaded.
- Then when they get to the US ports it takes them more time to unload the containers from the ship because of the significantly larger number of containers.
- Since there are more containers being unloaded than the ports were designed for originally there are not enough cranes, not enough workers, not enough trucks, not enough trains, and space to store containers at the port is scarce.
- There are two basic types of transportation methodologies of out of ports; 1) containers that get shipped as a single unit out of the area, 2) containers that get shipped to local warehouses to be sorted and then shipped out to other distribution points.Both are accomplished via trucks and trains.
- And since there are not enough trucks or train locomotives to move the containers out of the port, the containers have to be stored at the port till trucks & locomotives are available, which takes up valuable and limited space.
- And since more containers are now leaving the port full, more are coming back empty to be sent back to Asia. Those returning containers are also being stored at the ports waiting on the large, now empty, ships to take the containers back to Asia. And since the ports were originally designed for far fewer containers, the containers are taking up valuable space that would normally be used for off-loaded containers, awaiting transport. FYI – it is estimated that there are more than 80,000 – 100,000 containers sitting in US ports waiting for transport. Some estimates are double and triple that number.
- And since more containers are needed for these much larger ships there are fewer existing containers available for use at any given time. And production of new containers is way behind keeping up with demand.
Now here is why costs are going up:
- These container ships used to travel at about 22knots (25+MPH), the shipping companies found they can save significant fuel by slowing the ships to 12knots (14MPH). So those goods now take a month or more to arrive in the USA vs. two weeks when you add their slower speed and additional loading time. So the shipping company makes out by saving fuel costs, but the US importer now waits 2x – 3x longer for their goods, which in turn drives their costs up.
- Now, because it takes so much longer to unload those huge ships, ships now wait an average of 14 – 17 days to get a berth and be unloaded, some waiting as long as 4 weeks. And the shipping companies pass that “wait-time” cost on to the company who is waiting for the goods. FYI – the largest of the container ships wait the longest for a off-loading berth.
- Then once the ship is unloaded, the wait time for transportation of the container out of the port can run 1 – 3 weeks. And the ports charge the shipper for storage. And the shipping companies pass that “storage” cost on to the company who is waiting for the goods.
- Trucks are much harder to find because there are fewer truck drivers. There are fewer truck drivers for a number of reasons; 1) economy was locked down for over a year and many drivers didn’t come back to work, 2) drivers can make almost as much money on government handouts as driving, 3) more government restrictions on drivers and trucking companies.
- A container is finally loaded onto a national company truck and the costs go up again because there are fewer truckers overall so they cost more…and the cost of fuel has skyrocketed since Biden/Harris became president.
- If a container, or its goods, have to go through a regional/local trucking company from a national hauler then the prices go up again for the same reasons.
To verify my research, back in September I went to a local company whose owner I know personally and consider him a friend, he owns a propane sales company. And, I was also considering the purchase of a spare 100# propane tank to give us a little more depth to our heating, cooking, and clothes drying capability. The resulting conversation was enlightening to say the least.
He explained to me the retail cost of the #100 tank was currently $159.00 (same as lat year when I checked). I told him I would be buying one in the next few weeks. He told me, “Buy it now!” I was startled and asked him to explain. He told me they had a couple of pallets of tanks in-stock but had ordered more tanks the previous month based on expected weather this winter…but there were now “issues” involved …and he expected to run out of new tanks before the recently ordered tanks would arrive…LONG before they would arrive. So here are the basics of the conversation:
- In previous years they normally paid a wholesale price per tank from a manufacturer in China. They then paid a fixed shipping cost per pallet of tanks purchased. The tanks would show up 2 – 4 weeks later. Then they marked up the tank to a fair retail price…$159. All is well, business as usual.
- This year the wholesale cost per tank was now more than their current retail price for the same tank. Wow…bad! But that newer much higher price was before shipping cost was going to be added in.
- Then he explained the new shipping issues. The shipping cost was now per tank not per pallet, normally 18 tanks per pallet. And there was now no fixed shipping cost. The shipping company would charge them the actual shipping costs when the tanks were dropped off at the business. Yes, you read that right…they had no idea what the shipping cost would be until the tanks actually arrived! And finally…instead of 2 – 4 weeks…it would now be at least 3 – 4 months, potentially longer, to receive the tanks. Yes, that means missing a lot of the winter without the tanks being available to customers.
I was fairly stunned to hear the shipping chain issues brought to real life. It was as bad or worse than my research had shown. But he wasn’t done with me yet. He changed the subject…the cost of propane.
In the past year I paid $2.05 – $2.15 per gallon of propane. When compared with the energy value of gasoline it is not equivalent…the energy in 1.38gals of propane = 1gal of gasoline. So propane is normally cheaper than gasoline per gallon. And FYI (if you don’t already know), propane is a by-product of refining natural gas. And in recent years past the US was a net exporter of propane.
I glanced at his sign out front and propane was now $2.89 per gallon…roughly 40% higher than last year. Ouch! But he went on to explain that it would go higher…no doubt about it…and maybe get far worse. He explained that since Biden/Harris went on their fossil fuel wrecking campaign less propane was being made and the US was barely now able to produce what it needed/used…if the weather wasn’t worse than normal. And, if any other country tried to buy US propane the price would skyrocket. And, if the weather was even slightly worse than a normal year the price would go up. And that was in addition to any increase in the price of natural gas and gasoline…which would mean a corresponding increase in the cost of propane.
So far there are two areas of concern contained in this post: 1) the price of propane, 2) shipping chain issues. The propane issue is easy to understand and easy to see…if you didn’t look below the surface…even more so with the shipping issues. But, there is more…
Why is Biden/Harris trying to wreck the fossil fuel industries? It would be easy to state the obvious…they hate anything that is contributing to climate change. And you would be right…but there is more. That’s another conversation for another post.
Let’s talk more about the shipping chain…and some would refer to it as the supply chain. But the shipping chain is a subset of the supply chain…and essential beyond what many would think.
So why is there a shipping problem at all?
- Ship owners wanted to take advantage of “economies of scale” of trade between Asia (mostly China) and the USA so they built new very large ships. And since the price of steel was high they could help offset that building cost by selling their smaller and older ships for scrap metal prices. With the larger capacity ships the corresponding handling costs of each container went down…but so did the number of available container carrying ships.
- As fuel costs began to rise, thanks to environmental extremists, the ship owners could save money by reducing the speed of ships. Thus drastically increasing the time it takes goods to reach us retailers and distributors.
- Fewer ships, and newer more automated ships, meant fewer employees saving even money for the ship owners.
- There are not enough shipping containers to meet the demand for the larger ships so they are now having to buy new containers…cost to the shippers goes up. Used containers normally used for storage in the US have skyrocketed in price. So new and used container prices go through the roof.
- It takes more time for the ships to go to more ports to find more goods-packed containers to load onto the ships. The added time, delay in delivery, adds to wholesale and retail costs increasing.
- It takes more time to travel to the US ports so the retailers have a much longer, and unpredictable, wait time for products. The added time, delay and unpredictability in delivery, adds to wholesale and retail costs increasing.
- US ports are not designed to unload these new massive ships efficiently so it takes more time to unload ships in US ports. The added time, delay in delivery, adds to wholesale and retail costs increasing.
- Also, since US ports are not designed to handle the larger ships efficiently, it takes more time for the ships to be given berth space (room at the docks) in the ports. The added time, delay in delivery, adds to wholesale and retail costs increasing.
- Since US ports are not up to modern standards to handle the exponential increase in in-coming containers they don’t have the train and truck capacity to meet the incoming demand. Since the containers now have to sit in the port waiting for trucks and trains they incur storage fees charged by the ports…which is passed on to US retailers and distributors.
- Since fuel prices are going up substantially the ports are incurring more operational expenses. Those increased expenses are passed on wholesalers and retailers.
- Trains and trucks incur significantly more expenses for fuel as well. And drivers are being paid substantially more. Those increased expenses are passed on wholesalers and retailers.
So there you have it…now you know one of the reasons why everything is costing more and taking longer. But, that is the easy surface stuff still. What are the real issues taking place…the ones deep in the shadows…the ones to be most concerned about?
Here is my take on the real issues:
- Governments for a long time, especially China, embarked on very large-scale infrastructure projects running up the cost of steel due to “demand”. That dramatically increased the price of steel causing ship owners to sell smaller/older ships to offset the cost of the newer massive ships.
- Governments, with the exception of the US, embarked on radical anti-fossil fuel policies running up the cost of oil and gas production. Then in 2020 with the election of Biden/Harris the US embarked on similar radical policies (i.e. stopping oil & gas leasing, shutting down pipelines, and increasing other anti-fossil fuel policies & regulations). Example: Gasoline here locally is up 85% since the election of Biden/Harris.
- Ship owning companies, seeking more profit, reacted to rapidly increasing fuel costs by building massive new ships. This added to the steel shortage driving up those prices. But, they also knowingly added to drastic increase in time of delivery of goods between Asia and the US.
- Who controls the US ports that are limited in number and efficiency? Local & state governments. Who controls construction of new ports? Local, federal and state governments. And since ports have a notable impact on the environment during construction, who controls that? Radical environmentalists and their extremist politicians…and many different local, state, and federal government agencies.
Now a couple very important key things to think about:
- Was there a solution suggested when the large number of ships waiting to enter port became noticed? Yes, Biden/Harris got the federal government involved to force a solution on the ship owners, port owners, trucking company owners, rail line owners, etc. And there began quiet talk regarding a concept of federalizing US ports…meaning the US federal government would take control of all ports.
- When it then became popular to rage against the “supply chain” problems was a solution suggested? Yes, Biden/Harris are now forming a task force to study the issue. And it is already being talked about the federal government taking a stronger role in, if not outright control of, the entire US supply chain.
Do you see any patterns here…any dots begin to come more clear…connections being made?
Who was the only entity capable of fixing the COVID crisis? Well, according to the US government…the US government was the only entity that could deal with COVID. States couldn’t. Companies couldn’t. And certainly not individuals. And so we saw the country locked down, the economy ruined, massive big-pharma government subsidies, and a complete mess.
Would this be the appropriate time to talk about the FACT that the USA had contracted with the Wuhan Institute of Virology (a.k.a.Wuhan Lab) in China to do secret work developing strains of different viruses? Yup, it has been proven that the USA was working with the Wuhan Lab to develop viruses!
Yeah, maybe another day we talk about that.
So who was the only entity that could fix the entire mess? Well, according to the US government…the US government was the only entity that could fix it all. So they pumped printed/borrowed money into the economy by the trillions. They poured hundreds of billions more into stratospheric unemployment and related benefits. Then they went on to pour tens of billions of more dollars into stimulus checks for individuals. And notably unnoticed was the hundreds and hundreds of billions into corporate and market bailouts. And now we see inflation at historic levels and a job situation that is killing our workforce, personal income, and the entire economy.
And so who was the only entity that could fix the economy and employment situations? Well, according to the US government…the US government was the only entity that could fix it. So they passed a multi-trillion dollar infrastructure bill (yeah, claiming it was only a trillion$) with more printed/borrowed money. Oh, and only $100billion essentially goes into actual infrastructure…about 5% of the total amount.
But that doesn’t fix the horrific rise in prices for gasoline for our cars, diesel for our trucks and ships, and propane, natural gas and heating oil for our homes. And so who was the only entity that could fix situation? Well, according to the US government…the US government is the only entity that could fix it. So now they are proposing yet another multi-trillion dollar bunch of projects that contribute virtually nothing to the real economy but pours money by the truck load into radical leftist projects…and their big corporation campaign donors’ pockets. Oh, and to help the rising costs of driving, home heating, and goods transportation…the Congressional proposal includes a substantial new tax on oil & gas companies and their activities…which will drive the oil & gas prices even higher making everything cost even more at the cash register.
Note: There is a plan, led by the Democrats, to hit $6.00 a gallon gasoline. Their intention is to drive the price up to $6.00 to force the public to buy more electric cars and drastically reduce the consumption of gasoline and diesel.
Oh, and as if the new infrastructure bill of printed/borrowed money and new taxes at the gas pump isn’t enough…the US federal government via BLM is hitting the oil & gas industry again by stopping new oil & gas leasing on federal lands.
So the way I see it…the US government creates massive problems that especially hurt the average middle and lower income folks and the country in general. But that “hurt” is initially short-term but could be absorbed to a degree. The larger “hurt” is long-term, fatal, and irreversible. And in my opinion…INTENTIONAL!
Please take note that these massive problems are caused by who? And then who proposes the solution? And then who provides the solution? And how is the solution is provided?
Could it be the federal government is making it essential for people to turn to the federal government to fix ALL problems? And in the process people become totally dependent on the federal government in virtually all aspects of their lives?
But to explain myself I have to go a little off subject…
The last President to have a balanced budget was Clinton. And, no US president since 1930 has lowered the national debt…that’s nearly 100 years of increasing national debt!! And that debt now sits just shy of $30,000,000,000,000…30 TRILLION DOLLARS!!
Clinton had the smallest increase in the US national debt in recent presidential history…then Bush #2 basically doubled the national debt over his 8 years. Then Obama in his 8 years basically doubled it again over Bush #2. And had Trump served 8 years he would have doubled it again. As it was, Trump had the highest annual increase in the history of the United States. But never fear…Biden/Harris are on track to quadruple the US national debt over Trump!!!
The US cannot survive that. And you read that right…I didn’t say the US economy can’t survive that. I said the US cannot survive that. Well, truth be told…the US won’t survive what they have already done to us.
Every president since 1930 has intentionally increased the United States National Debt. Most of that debt increase came through our large numbers of wars, also through massive socialist welfare programs and corporate bailouts. Yes, that is 16 presidents intentionally increasing US debt…8 Democrats presidents and 8 Republican presidents. Ironically the largest annual increase of US debt over their presidential terms came from a so-called conservative president that millions of people idolized and worshipped…Trump. He was racking up national debt at $2trillion per year…60% more than his nearest competition…Barack Obama (Marxist/Socialist).
Now, please pay close attention because I am about to be plain and blunt…
The government of the United States of America and all of her presidential administrations and virtually all of the US politicians, past and present, are intentionally running the US economy into the ground for the last 130 years. Yes…INTENTIONALLY destroying the US economy!!!
And yes, they are fully aware that the United States of America as we know it cannot survive the kind of economic collapse/crash/transition that we are looking at. That is their plan…and has been since the 1890’s when the Progressive movement started and with the rise of Communism in the United States (i.e. the modern Democrat Party). But, make no mistake about it…the Republicans are just as guilty as documented historic fact proves.
Everything that is happening now, our current events, supports those two goals, destroy the US economy and strengthening the power of the US federal government.
Now I want to ask “Why?” but before I do, you may ask how I can prove the “intentional” claim.
That is simple…if it was not intentional then it means every single president, every single presidential administration, every single Congressional session, and every single member of the Federal Reserve was not aware of what they were doing for 130 years!
Meaning they were ALL stupid, ignorant, or just plain incompetent. And would that make sense, that they were all just incompetent people?
Yes, I know that popular humor would direct you to “Yes!” But, being realistic here they couldn’t all be stupid, ignorant, or incompetent.
If even one president or one Congressional session was aware of what was happening, intentional or not, wouldn’t they have attempted to stop it? Would they not have taken comprehensive and meaningful steps to stop it and turn it around? Or, at the very least exposed what was happening to rally the public behind them?
Is there any other possible viable explanation?
Now…back to the question “Why?”
Really simple when looked at in total…because the plan is to transition the United States of America into an authoritarian state. Once that is accomplished then the wealth and power in this country is concentrated even more. And the individual citizen, with their Constitutional rights, will exist no more.
And they are almost there…they have one foot across the finish line.
Now, for those of you who think there is saving the US by our politicians, the Supreme Court, or anyone else in Washington DC, which to me means restoring the US Constitution, it ain’t gonna happen. Proof? Because it has been just the opposite for over 120 years…every US president and Congress has chipped away at Constitutional rights. Even the Supreme Court sure hasn’t put a stop to the plan…actually, they’ve been enabling it. Even the president who had millions of people idolize and worship him, and most still do, Trump. Trump hurt gun rights, chipped away at property rights, ran up record budget deficits, added record amounts to the national debt, etc. right along with all the others.
So what do you do?
I have been saying it for years:
- Forget politics!!!!!!!!
- Define your personal correct principles, then live by them. (I suggest based on God’s eternal principles and principles found in the Constitutional and Declaration of Independence.)
- Share/teach the Constitutional, Declaration of Independence, and other correct principles to your family, your neighbors, your congregation, and your community.
Folks…please ponder what I have said…see how it fits into your life…act accordingly. Please listen to your instincts and that still small voice inside of you.
- SitRep – 3/1/2021
- SitRep – 5/3/2021 (part #2)
- Modern Monetary Policy
- USA In Endless Wars
- 4th of July – Independence Day 2021
- “Government is the problem!”
- Power, Politicians, Crushing People…and “Prepping” – Part 1
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