The price of everything going, the shipping industry contributing to the problem

An interesting article


If paints shippers, and Hapag in particular in a bad light with 10 times the normal cost for freig
The markup on shipping a container is tiny, any market fluctuations will massively impact shipping costs, any inflationary costs, fuel costs, delays will increase shipping costs rapidly.

Like any industry you'll get a few bad eggs, but the majority of the industry will still be operating at those small margins.
 
The article does say margins have got up to 57%. That's not tiny.

The source in the article takes you to a Facebook post by Alphaliner. They are a huge shipping logistics company who are directly impacted by any changes to fees etc. I can’t be bothered to delve deeper into their data sources but I’d be cautious. Regardless, Alphaliner themselves comment that margins are at 57% but only after running at -0.2% in the 10 years before the pandemic. So companies have lost money for a sustained period of time and then were, presumably, heavily impacted by Covid. Who could blame them for seizing this opportunity? Certainly not anyone who votes in neoliberal government after neoliberal government. If you make your bed etc etc.
 
So a company is entitled to rip people off cos they ran at a loss for 10 years?
The source in the article takes you to a Facebook post by Alphaliner. They are a huge shipping logistics company who are directly impacted by any changes to fees etc. I can’t be bothered to delve deeper into their data sources but I’d be cautious. Regardless, Alphaliner themselves comment that margins are at 57% but only after running at -0.2% in the 10 years before the pandemic. So companies have lost money for a sustained period of time and then were, presumably, heavily impacted by Covid. Who could blame them for seizing this opportunity? Certainly not anyone who votes in neoliberal government after neoliberal government. If you make your bed etc etc.
 
The markup on shipping a container is tiny, any market fluctuations will massively impact shipping costs, any inflationary costs, fuel costs, delays will increase shipping costs rapidly.

Like any industry you'll get a few bad eggs, but the majority of the industry will still be operating at those small margins.
Shipping a container China to Huddersfield 3 yrs ago £1250 now £8000 !!
 
So a company is entitled to rip people off cos they ran at a loss for 10 years?

A common feature of this board is the willingness to ram words into other people’s mouths. You certainly missed the tongue-in-cheek nature of that sentence. I figured the end of my post might have been a clue.

If I was arguing for the shipping companies, I’d say who are you to decide what’s a reasonable margin? I’d say that 12 years of losses does indeed entitle them to raise prices. I’d say market forces dictate the prices. If it is too high then it won’t be paid. I don’t actually subscribe to that because I think neoliberalism is the cause of all the misery and poverty in the world. However, I can see the issue from another perspective even if I do not agree with it.
 
A common feature of this board is the willingness to ram words into other people’s mouths. You certainly missed the tongue-in-cheek nature of that sentence. I figured the end of my post might have been a clue.

If I was arguing for the shipping companies, I’d say who are you to decide what’s a reasonable margin? I’d say that 12 years of losses does indeed entitle them to raise prices. I’d say market forces dictate the prices. If it is too high then it won’t be paid. I don’t actually subscribe to that because I think neoliberalism is the cause of all the misery and poverty in the world. However, I can see the issue from another perspective even if I do not agree with it.
You said ‘who can blame them’ they’ve gone from a margin of -0.2% to 57%. It just doesn’t feel reasonable
 
You said ‘who can blame them’ they’ve gone from a margin of -0.2% to 57%. It just doesn’t feel reasonable

Yeah I guess it’s not clear in my post. I’m saying that people who vote in atypical free market governments can have no complaints about these rises. Market forces are dictating the prices. If they were beyond reason then they simply would not be paid. You cannot silently accept the -0.2% and then kick up a fuss when it goes the other way. Well people can but they deserve to be ridiculed.

Perhaps in the long run, it’ll benefit the masses. Consume food produced closer to home. Save the planet and your money.
 
Yeah I guess it’s not clear in my post. I’m saying that people who vote in atypical free market governments can have no complaints about these rises. Market forces are dictating the prices. If they were beyond reason then they simply would not be paid. You cannot silently accept the -0.2% and then kick up a fuss when it goes the other way. Well people can but they deserve to be ridiculed.

Perhaps in the long run, it’ll benefit the masses. Consume food produced closer to home. Save the planet and your money.
What you don’t think people can not be upset that a company is choosing to have a margin of 57% when they had a margin of -0.2%. What is the reason for it? Why are the running their margin so large now.

It clearly not just the markets, because they have choose their own margin.

The context might make it acceptable, but I don’t know then context.
 
What you don’t think people can not be upset that a company is choosing to have a margin of 57% when they had a margin of -0.2%. What is the reason for it? Why are the running their margin so large now.

It clearly not just the markets, because they have choose their own margin

Mate this is painful. I don’t think it’s a fair margin. I have no clue about the shipping industry. However, do you think -0.2% margins are fair? Obviously the correct answer is somewhere in the middle. Many economic liberals are happy in the good times (-0.2%) and throwing their toys at other times (57%). Its hypocrisy of a huge magnitude. Let me just state explicitly for the sake of everyone’s sanity that I think market rates should be set and regulated by independent bodies (preferably socialist governments).

I’m afraid the market is deciding. That’s the world we live in. Economics 101 would surely say that if a price is too high then it will not be paid.
 
Mate this is painful. I don’t think it’s a fair margin. I have no clue about the shipping industry. However, do you think -0.2% margins are fair? Obviously the correct answer is somewhere in the middle. Many economic liberals are happy in the good times (-0.2%) and throwing their toys at other times (57%). Its hypocrisy of a huge magnitude. Let me just state explicitly for the sake of everyone’s sanity that I think market rates should be set and regulated by independent bodies (preferably socialist governments).

I’m afraid the market is deciding. That’s the world we live in. Economics 101 would surely say that if a price is too high then it will not be paid.
So what’s the context around margins changing. This discussion between me and you is because you said ‘you can’t blame them’ for their margins

I think you’ll find there’s a lot of apathy towards rising costs. Some things have to be paid or you don’t have it. Shipping costs aren’t paid, goods don’t get delivered
 
The source in the article takes you to a Facebook post by Alphaliner. They are a huge shipping logistics company who are directly impacted by any changes to fees etc. I can’t be bothered to delve deeper into their data sources but I’d be cautious. Regardless, Alphaliner themselves comment that margins are at 57% but only after running at -0.2% in the 10 years before the pandemic. So companies have lost money for a sustained period of time and then were, presumably, heavily impacted by Covid. Who could blame them for seizing this opportunity? Certainly not anyone who votes in neoliberal government after neoliberal government. If you make your bed etc etc.
It was the same at Maersk 10 years ago too with losses. Those losses impounded by having to expand fleet because the demand for global seafreight movement was growing beyond capacity.
 
So what’s the context around margins changing. This discussion between me and you is because you said ‘you can’t blame them’ for their margins

I think you’ll find there’s a lot of apathy towards rising costs. Some things have to be paid or you don’t have it. Shipping costs aren’t paid, goods don’t get delivered

I explicitly told you that I said that phrase as a way to demonstrate the failings of liberal economics. Then you go on to prove my point. If shipping costs aren’t paid and goods aren’t sold then prices will simply have to come down. Mart absolutely understands the point. See if his post is easier to digest.
 
I explicitly told you that I said that phrase as a way to demonstrate the failings of liberal economics. Then you go on to prove my point. If shipping costs aren’t paid and goods aren’t sold then prices will simply have to come down. Mart absolutely understands the point. See if his post is easier to digest.
I appreciate your input as this isn't an industry I have experience in. What stuck out to me was that its not just the margins, but the behaviour of the shipping companies as well. It reads in that article like they are deliberately manipulating a situation and then profiting out of it with demurrage fees.
 
I appreciate your input as this isn't an industry I have experience in. What stuck out to me was that its not just the margins, but the behaviour of the shipping companies as well. It reads in that article like they are deliberately manipulating a situation and then profiting out of it with demurrage fees.

They probably are pal. If you know nothing about the shipping industry then you’re doing about as well as I am. However, if a company calls you asking you to unload bananas as their usual guys are not willing to, it doesn’t take a monetary genius to work out that you have an incredible amount of leverage. You’ve lost money hand over fist for years, why wouldn’t you take advantage? I don’t agree with it but then I don’t agree with the negative margins of previous years. Some people want all the benefits of the free market without understanding that it might not always be bells and whistles. The dude in this thread angry he might have to pay 50p more for a bunch of bananas but is happy to disregard the fact he’s paid 5p under cost for the last 15 years (I’m paraphrasing for effect, of course). It’s hypocrisy.
 
They probably are pal. If you know nothing about the shipping industry then you’re doing about as well as I am. However, if a company calls you asking you to unload bananas as their usual guys are not willing to, it doesn’t take a monetary genius to work out that you have an incredible amount of leverage. You’ve lost money hand over fist for years, why wouldn’t you take advantage? I don’t agree with it but then I don’t agree with the negative margins of previous years. Some people want all the benefits of the free market without understanding that it might not always be bells and whistles. The dude in this thread angry he might have to pay 50p more for a bunch of bananas but is happy to disregard the fact he’s paid 5p under cost for the last 15 years (I’m paraphrasing for effect, of course). It’s hypocrisy.
True enough. There is a lot of nuance in that article. The guy who couldn't get their normal trucking guys said it was because Hapag were refusing to accept returned containers, so the trucking company was refusing to accept loads using them. Other truckers then said, yeah we can do it, but based on our experience with Hapag, you are going to have to pay these exorbitant fees up front because we know we are going to have the same issues and pay demurrage charges.

So, again to my untrained eye, it looks like Hapag (and other shippers) are deliberately manipulating the global logistics process in order to extract more profit. I agree with you that running at a -0.2% loss is not good and they deserve to make money, but 57% margins is nuts. In terms of global freight, these guys are at the top and it does make me wonder how much of the price increases are simply down to what appears to be price gouging.
 
True enough. There is a lot of nuance in that article. The guy who couldn't get their normal trucking guys said it was because Hapag were refusing to accept returned containers, so the trucking company was refusing to accept loads using them. Other truckers then said, yeah we can do it, but based on our experience with Hapag, you are going to have to pay these exorbitant fees up front because we know we are going to have the same issues and pay demurrage charges.

So, again to my untrained eye, it looks like Hapag (and other shippers) are deliberately manipulating the global logistics process in order to extract more profit. I agree with you that running at a -0.2% loss is not good and they deserve to make money, but 57% margins is nuts. In terms of global freight, these guys are at the top and it does make me wonder how much of the price increases are simply down to what appears to be price gouging.


I can’t and wouldn’t want to argue with anything you’ve written there. Price gouging is seemingly more prevalent in times of global austerity. Paradoxically so.
 
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