Uh oh!-Shipping rates hit zero as trade sinks

[Gilgamesh]

I've noticed that all the beef at Safeway has a sticker that says "Product of USA, Canada, Mexico".  Anybody else notice this?  Personally, I don't want to buy meat that was raised in Mexico.  I'm not sure what the cattle were fed, etc. (i.e. mad cow danger)  So, we are as careful as possible to check the origin of the meat and produce whenever possible.

I saw an article years back that Gilroy, the garlic growing capitol of California was having a hard time competing with imported Chinese garlic.  Who would have though back in the 80's.

[offdalip]

I saw an article years back that Gilroy, the garlic growing capitol of California was having a hard time competing with imported Chinese garlic.

I was just in Puerto Rico, and I thought I would score some nice creole cuban/puerto rican garlic like I used to get a few years back.......
Nooooooooo... what I found was all imported chinese garlic  if I find the same in Miami then I will be truly 

[Rusty Shackelford]

Craftsmen tools are all that's left of the old Sears.  If they do discontinue the replacement policy, I'll never have a reason to go there again.  I worked at Sears in high school, and many of their employees were full time people and it wasn't unusual to see people who had worked there for 30-40 years and we had one lady in my department who had been there over 50 years (started at age 14).  Sears discontinued full time employment while I was there and as those people left, they weren't replaced.

I used to buy a lot of clothing at REI in Seattle.  REI actually owned a company called Thaw that manufactured most of their clothing (as well as Browning and Remington branded clothing).  All high quality.  REI closed thaw and started importing from China.  To me this was an anathema to the REI corporate culture, which was the only reason I shopped there. They sold out.   My dividend used to be about $80-100 a year.  Now it's like $5 and a lot of years, I don't even bother cashing it out - the only thing I buy there now is socks.

[darwinslair]

I still chuckle sadly thinking that American Business management thought that by eliminating jobs here, moving production overseas, and raising profit margins on paper that in the end it was a good thing, without really taking into account that if you eliminate the wage base here no one here could buy their products regardless of the new profit margins they show on their sheets.

Idiots.

They are going to find out just how many of their products are actually nessesary, and how many were just nice to have but we can do without, because we are all going to be doing without a lot of things.

We can still produce all of our own food without anything more than some minor modifications to our farming infrastructure.  The manufacturing base will take a generation to rebuild though because we dont have the money to do it.

I am having fun planning gardens though.  I am working hard at maintaining 12+ months of food on hand and enjoying it.

Tom

[MountainMeg]

without really taking into account that if you eliminate the wage base here no one here could buy their products regardless of the new profit margins they show on their sheets.

YES!  I've been spouting this since I had to leave Michigan back in '92 to find work as a newly minted accounting grad.  The auto companies at the time had gone through a massive white-collar layoff.  Same question.  "Who's gonna buy your stuff if no one has an income?"

[Mike]

Here is a recent chart of the Baltic Dry Index



The Baltic Dry Index is the cost of shipping bulk dry goods over 26 different routes using different sizes of ships.  A low cost of shipping (90% off the high) does not necessarily mean a 90% decline in volume.  Imagine shippers cutting there charges to the bone in fierce competition for loads.  I'll bet ~90% of the volume could be handled for around ~1,000.

Walmart stuff is not shipped in bulk  ships, but container ships.

To get a handle on container shipping, Port Tracker seems to be the authority.

http://www.trafficworld.com/newssection/ocean.asp?id=49730

Port Container Traffic Fell 8 Percent
2/6/2009
Thomas L. Gallagher
Web Editor

Retail container ports handled 15.2 million twenty-foot-equivalent units last year, according to the monthly Port Tracker report released Feb. 6 by the National Retail Federation and IHS Global Insight.

Volume was down 7.9 percent with the lowest total since 2004, when 14 million TEU moved through the ports. And even harder times are coming in the first half of 2009, said Port Tracker.

In the first six months of 2008, ports handled 7.5 million TEU. The survey forecasts traffic will decline 11.8 percent to 6.6 million TEU.
 
"2008 was one of the most challenging years retailers have seen, and all indications are that 2009 won't be any better," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Unfortunately, cargo volume at the ports reflects retailers' anticipated sales, and NRF expects that sales will get worse before they get better. Retailers are only going to import what they can sell."
 
U.S. ports surveyed handled 1.06 million TEU in December, the last month for which actual numbers are available. That was down 13.9 percent from November and 17.2 percent from December 2007, and made December the 18th month in a row to see a year-over-year decline. The last month to see a year-over-year increase was July 2007, when the 1.44 million TEU moved through the ports was up 3.4 percent from July 2006.

January was estimated at 1.04 million TEU, down 15.8 percent from January 2008, and February, traditionally the slowest month of the year, is forecast at 1 million TEU, down 18.7 percent from 2008. March is forecast at 1.08 million TEU, down 7 percent from a year earlier, April at 1.14 million TEU, down 10.1 percent; May at 1.16 million TEU, down 11 percent, and June at 1.19 million TEU, down 8.5 percent.
 
"The combined influence of the recession and the usual winter slowdown will result in extremely weak February port traffic," IHS Global Insight Economist Paul Bingham said. "Import container traffic is projected to be weak through June because of the underlying reduced demand during the global recession.

Comment: 
The BDI increase from 1,000 to 2,000 piqued my interest.

Could this be the Peter Schiff Scenario where the consumption of the worlds resources shifts from the US to the rest of the world?  Could the BDI increase might suggest this?