July 27, 2010
That is what readers of an NYT article on higher shipping fees for faster service must be wondering. The article tells readers that shippers now have a shortage of space because:
“With little demand for shipping, ocean carriers took ships out of service: more than 11 percent of the global shipping fleet was idle in spring 2009, according to AXS-Alphaliner, an industry consultant.”
Okay, so we are seeing a big run-up in prices and, “fighting for freight, retailers are outbidding each other to score scarce cargo space on ships, paying two to three times last year’s freight rates — in some cases.”
ummm, what happened to the 11 percent of shipping fleet that is now idle? The article does make a brief reference to this idle capacity later, noting that firms are reluctant to bring it back on line. This sounds a bit like a case of collusion to keep prices high. It might make for a good article by an enterprising reporter.
(I’m back from the DC power failure – 32 hours in my hood.)
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