Baltic Dry Collapse

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ancona

ancona

Praying Mantis
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Is anyone else watching the Baltic Dry Index? We're now at the lowest ever since the thing was started. Many are pointing to oversupply, but I believe it to be a result of crashing demand. I look out west to the striking dock workers and wonder what the hell those ding dongs are thinking. Who goes on strike when you're making a hundred large and getting 100% paid for platinum level health insurance and a guaranteed 80 large a year pension benefits?

Remember, these yo yo's aren't engineers, they're not doctors or lawyers, they are at best, high school graduates that got a job at the docks. While there may be a few crane operators sprinkled in here or there, the majority of these guys are just average Joe types that happened to get lucky and score a job at the wharf that pays well. Their greed is breathtaking here folks. It will serve them right if shippers decide to say fuck it all, unload in Mexico and simply move the freight with Mexican drivers along routes approved under NAFTA. As a matter of fact, the goods may become cheaper still, since I doubt that Mexican dock workers earn anything approaching a hundred large a year, and Mexican truck drivers also earn far less than their American counterparts. These guys just don't get it.:popcorn:

Inventories are rising fast and folks just aren't spending like the good old days. Many are forced to use their tax refunds to pay for Obamacare they don't want, so the usual surge of car sales and iPhones this time of year ain't happening the way it did in past years.
 
What killed the dock'workers' union in the UK was the advent of shipping containers.
The big dockers union eventually destroyed their industry by having a national strike and causing everything to go through a couple of relatively unknown ports that only handled container shipping and were not run by the unions. They proved to everyone that this was a far better way to move things and that there was an alternative.
The UK union dockers were guaranteed a job for life with very good pay and pensions and to this day are crippling places like the port of Liverpool which is STILL paying em to load or unload almost no traffic.
As Ancona says, an alternative will evolve that will work around a blockage.

Be interesting to see how that plays out at Gov level in the US, as their unions still seem to be able to steer things at a legislative level.

The Thatcher years were good for the UK in that they reigned in the big unions. The final showdown being the coal miners. And we now only use foreign coal even though we have huge coal deposits in the ground.
 
Look at all the oil refinery workers that are currently on strike in the US. I am still amazed they are demanding higher pay, more benefits, more safety equipment, ect when energy company profits are in a nose dive?!
 
...

Great thread, ancona.

I have taken note that CONTAINER (20' ones anyway) shipping rates have NOT come down on the East Asia to Peru routes. I guess the little guys get it again...

* * *

Hey, I remember from long ago I went to Port Newark (NJ) with a friend to retrieve the very first import order I ever did. It was a complicated procedure, it took all day. While waiting for some paperwork, I went to the can, where there was some absolutely delightful graffiti... I finally learned what "ILA" stood for:

I'm a
Lazy
As**ole

(East Coast longshoremen's union, probably a Teamster who wrote that, yeah, the ILA members were way overpaid even 30 years ago)

The things you can learn on the road...
 
Why wouldn't they strike? I mean it's not like well paying, full time jobs with killer bennies are hard to find. Wait, I just remembered, I don't live on the loony left coast. Yea, I don't get it either. You also have the refinery workers striking as the oil industry is starting to lay off people from a glut of oil, and are looking to further automate the refining process. These people are going to promote themselves to the unemployment/welfare line in no time with all their crazy demands.
 
DoChen,
That is likely because you use a freight forwarder. The guys on either end of the trip still have to handle and deliver the container, so those numbers don't change much. As far as the ships, their rates are not static, relying on traffic flows to create less capacity to increase rates. They are now in a perfect economic storm, with falling demand and the fact that larger lines will hedge oil prices to even out costs over time, so they maybe don't yet feel the lower oil prices. When that hits, rates could fall farther still. The cost of shipping a pound of freight by container ship is rock bottom to begin with, so it's mostly all the other stuff from portal to portal that hasn't fallen with the actual cost of thee boat.
 
"falling demand"

That means- your typical person is paying basic household bills. People cant or wont go into debt for the extras like they did in 2006.

Lets recall inflation has been running at 2%- note that the newspaper says folks are hoarding money. (at home)

Consider the average TV bill now- is like $140. It wasnt that long ago that $60-$80 was obsceen for TV.

...ponder- why do many cars cost more then some house.

We are a FIRE ecomony- basically we all push paper. Our whole GNP is paper pushed around. It is a marvel that anything real even happens.

Meanwhile Social Security Disability is going to be cut 19% next year. (unless congress fixes it- which is deadlocked)

It is true that cost of gas- fell and people might have more money- but the lower cost will take 6 months or more to show up in other goods.

We could build an actual car for $8k-$12k. Regulations and mandates...and restrictive laws-- ask tesla. as UBER.

We are shifting into the internet era. The whole world as we know it is changing and the powers that be- dont want their certain model to change. Obama is about to control the Internet. The whole notion of IP law, copyright- 33% of new lawsuits are troll- faked. So- you have hollywood- movies, music- the creative- industry-we last had creativity in the 60s- since then not much substantial. The old media is not going to accept the new ways. I read that the law obama wants- will have assset seisure- over copyright- and the component of dollar is negated- if you simply have copytighted files -that they think you did not license- your stuff can be seized- (obamas plan)

Unions are greedy.

My brother in law is union.

Meanwhile you have fergossin protesters still protesting. They cost St Louis 6 million $ one week alone. So- I want to know- why we cant cut off their welfare for this. If you can protest you can work. ...the other day a new shooting in seattle- and Mexicos president pipes up- the dead was here 10 years and a Mexican citizen. He picks fruit. 100 people have protested in that city- this is the 3rd killing. The mexican guy was throwing rocks. Well- for zombies- rocks can be deadly- they can do a ton of damage. A rock is a deadly weapon. Kids throw rocks off of over passes and drivers have been killed.


--- and the Grammys are the whitest in 35 years! Can you feel this? It is the 6 month anniversary of Mike Brown killed. Protesters defaced the st louis arch- and other venues- and they get hostile- the garbage dump they block the road- his memorial.... I see comments- and whites are under fire for being racist- so after 6 years of obama- we have more cry babies who cry over slavery. What happens when that crowd flips out? They blocked the street- an ambulance could not get thru and a man died- in the Bay area. So- life is so unfair- what happens- when grocery stores- simply dont have groceries to loot?

That day is sooner then we think
 
Cargo ships will achieve the same position as previous boom in shipping expansion; the ocean floor.

As if this strike is remotely related to the Baltic tanking, not at all.
 
rent in the townhouse in back of me went up 5%. I guess the owner did not hear official inflation is 2%
 
I in no way meant to infer that the west coast port strike was related to the fall in the BDI, merely that the strikers are not using their heads right now. The rest of the folks that don't have platinum level health bennies and a 125,000 dollar a year pay package with guaranteed pensions are going to have zero sympathy for their "plight".
 
bloody fight- at my brothers. one of his workers attacked him. the girlfriend kicked him out- so the worker showed up at my brothers house with his stuff and said he was going to move in. when my brother said no- the kid beat his ass and got his ass beated. So- the police were called and the kid went to jail. He wont have anymore work- from my brother or his circle of people.

that is how the entitlement mentality is going.

huff post has a article- rising rents are a crises. the govt needs to do something about it they say. I read the 55 comments. most of them seem to want a free house- and greed is the fault of GOP.

funny thing- now my brother is starting to sound like us. guns, gold, and preps.
 
I would imagine that the Greek showdown with the Troika has a caused a lot of economic activity to be put on hold as people/companies try to hold some cash for a worst case outcome.
 
Well, I see silver getting punished pretty badly in early trading, and gold ain't far behind. Someone needs cash, and they need it fast.
 
I just closed a credit card. I see 2 items I disputed jumped back onto my credit report.

cap 1 allows you 5 credit cards. when you get one- they have 9,12,15 mos int free depending. So I had 5, and closed the most expensive one. The one with a balance -starts charging interest Sept. So- now that I dropped to 4, I might be able to grab a different one. I owe $4200. The other idea is to sell some metals. If I can slide with no interest then I wont bother. If I have to pay retail credit card interest - then I will sell some coins.

I dont mind a balance- I do mind interest
 
Now hovering at 509, with a 7 point drop again last night. Holding this trend, it will fall below 500 by Friday, potentially triggering derivatives of some sort.

This is getting real interesting. If Obama doesn't invoke Taft-Hartley here we could see shit get real pretty soon. All that shit in containers off the coast ain't going to unload itself, and so it's only a matter of time before these shippers say fuck California and re-route the goods to another port. A ship full of boxes that cannot dock is not making its owners any money, so a little loss now is better than waiting out these petty strikers.

If these were my ships, I would have already re-routed them and made deals with other ports in other states. California is really good at shooting itself in the foot. Kind of like that 15 dollar minimum wage law. It isn't helping anything, rather, it is killing small businesses.
 
the $25 rent increase put the neighbor over the edge- she is moving to another town. She signed a lease and is moving this weekend.

In the mean time- I will have to hear her boyfriend cry about her. I cant say to him- "she just isnt into you".

$25 was enough for her to pack up and move. Her daughter got her income tax- which includes the kid- so EIC- 4 of them are going to live in a trailer in the country. Oil-heat-


union guys have to realize- it is a whole new ball game. 3rd world will work for $1 a day.

You mention $15 min wage- the left- doesnt factor that fixed incomes do not benefit.


I was playing with some numbers and if I pay an extra $20 a month my house gets paid off close to 5 years earlier.
 
West Coast Port Strike Causes Massive Cargo Slowdown
FEB 18 • FEATURED, NEWS • 360 VIEWS • 5 COMMENTS

The Chinese New Year begins tomorrow (Thursday, February 19th), however the loads of goods such as celery, broccoli, and lettuce that were sent to Asia weeks ago don’t have the slightest chance of making it in time – due to the labor slowdown on West Coast ship ports.

The ongoing 14-week labor dispute between the operators of 29 port terminals and the ILWU (International Longshore and Warehouse Union – which represents 20,000 dockworkers, truck drivers, teachers, and healthcare workers) has brought on a massive worker slowdown – causing ships and cargo containers to stack up from Seattle to San Diego – leaving contents to spoil and merchants without goods.

Some ports shipping times have doubled and tripled. When the Los Angeles port opened after the weekend shutdown (on February 7th and 8th) of the 29 West Coast port terminals by PMA (Pacific Maritime Association), cranes began unloading as early as 9:00 AM, but many ships were still stuck sitting offshore.

According to Adan Ortega, a spokesperson for ILWU’s Local 13, ship and terminal operators may have been purposely slowing down work to make a larger profit. Ortega says that one-third of the typical workforce has been unloading the ships, “they are expecting 45 workers to do the work of 120. They created this situation.” He also says that there is no real backup at the ports and that operators seem to be creating an “illusion of congestion.”

However, the port operators claim that the backup is real – and is being caused by the worker slowdown.

According to PMA spokesman, Steve Getzug, “Since November 3 at the ports of Los Angeles and Long Beach, the union has refused to dispatch skilled workers who operate yard cranes.” Getzug says that only one-third of crane operators is being sent out. Without crane operators, containers can’t be moved from ports off of ships onto trucks and trains – that backs up the process.

As a result, customers are now asking for air shipments, and companies have no choice but to pay higher transportation charges.

According to Tyson Foods CEO, Donnie Smith, 25% of pork is exported (mostly to Asia). The American Meat Institute has estimated a loss of $30 million weekly for meat and poultry producers.

ILWU’s contract that represents West Coast dock workers expired on June 30th, and talks have been going on between PMA and ILWY ever since. – One of the big issues being chassis for tractor-trailers that are being utilized to move cargo containers once they’ve reached the port. Those chassis were owned by the shipping lines up until last year, and were being inspected by longshoremen. However, now that drivers at West Coast ports (as most ports do) own or lease the chassis – inspection is being outsourced.

ILWU is lobbying for ports to require chassis inspections by union workers prior to the truck’s entry onto port property. Shipping lines are saying that they can no longer make those demands since they don’t own the chassis.

Another major issue is the demand for automation, similar to the way ports in Europe and Asia operate. Robotics have replaced a number of union longshoremen and are able to more efficiently unload the ever-growing cargo loads.

Currently, the biggest concern is that the dispute will eventually lead to a union strike or owner lockout – which would shut the ports. An event that has happened before (for ten days in 2002) – it resulted in millions of dollars in losses and only ended after President George W. Busch invoked the Taft-Hartley labor relations law.

Check out these amazing aerial photos of the L.A. and Long Beach Ports!

40 cargo ships waiting to unload at Long Beach Port & now a rail strike in Canada. Thank Unions for holding up goods pic.twitter.com/r7F6NkIFIu”

— Brent Edmonson (@BrentEdmonson) February 15, 2015
 
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