Oct

5

An Armor Conspired: the Global Shipping Freeze

First, the foundations. While bottlenecks are occurring everywhere, at present US ports are disproportionately affected. Docking locations along US coasts are among the slowest in the world: not because of size or technological capacity but collective bargaining hindrances. As Dominic Pino recently wrote,

Why are our ports so far behind? Not because we don’t spend enough on infrastructure, as the Biden administration would have you believe. The federal government could spend a quadrillion dollars on ports, and it wouldn’t change the contracts with the longshoreman unions that prevent ports from operating 24/7 (as they do in Asia) and send labor costs through the roof. (Lincicome finds that union dockworkers on the West Coast make an average of $171,000 a year plus free healthcare.) The unions also fight automation at American ports today, “just as they fought containerized shipping and computers decades before that.”

James Lackey adds:

Pete there is another one you can add to your list: The conspiracy to collude. The ftc is looking the other way whilst all car manufacturers minus Toyota Subaru and Mazda are limit up on next years ie 2022 sticker prices and it's not collusion - if you're not cheating, you're not winning in racing.

Oh, and the help wanted signs are bullshiza as they do not want to hire anyone as their wage offers are limit down. They can't pay back the ppp - they are all broke.

Bud Conrad comments:

The article is long on the sequence of events that colluded to a Perfect Storm of shipping delays. But he doesn't pick the specific culprit (Labor Unions? Government Port Investment? COVID Rebound? Trucking and intermodal capacity inadequacies? and I'll throw in another: Some kind of government or business sector conspiracy to get prices higher.

Regardless of the cause, the impacts on our economy are likely to be most felt in surprisingly high price inflation, for a broad range of products, that the US no longer knows how to make.

We will also see prices rising from the expanded money supply. Wage price inflation is already visible.

Pete Earle responds:

I don’t pick a specific culprit as the current state is not the product of a singular influence. Very simple, and the entire point of my article.

"Some kind of government or business sector conspiracy to get prices higher." [Not a reasonable theory.]

Bud Conrad clarifies:

I learned a lot in reading your article, and the problems you so well identify, including presenting the many charts. Yes: the world and its movements do work with multiple influences.

My challenge was rooted in my hope for identifying an overriding cause that could be addressed, and thus be the course of action to get things back into balance. Of course solutions will require many many efforts. And that was your point. What do you expect to happen?

I also threw out what I expected to be the consequence, that we would have very high price inflation, which will have obvious implications for all of us.


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  1. J. G. on October 3, 2021 6:44 pm

    Yet the Baltic Dry Index made a high Friday that hasn’t been seen since 2008.

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