Deflation in Shipping Rates

Deflation is everywhere, a process the powers that be cannot counteract, and showing up in useful areas, such as shipping:

The glut of massive ships is adding to the overcapacity on the world’s busiest trade lanes, particularly the benchmark Asia-to-Europe route, pushing the cost of shipping a container from Shanghai to Rotterdam down to a record low of $342 per 20-foot container last week. The year-to-date average is $742 a container, down 36% from the $1,151 average for the first five months of 2014.

At the small business level freight rates are of little consequence, the more important aspect is the implied capacity availability.  What is not noted is if the plan to chase the littler guys off the main routes works, those littler ships will start to call on more marginal ports, where some money can be made, making world trade even wider.

Search and learn new markets no one else has found for new markets are opening.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post