ghostwriter66
"Here - Hold my Beer"
As you can imagine I get a tremendous amount of our battery stuff we use at work out of China. Mostly because of availability first and then prices second.
One of our lead buyers that lives in China is saying that shipping cost has increased by about 300% from last year - China to LAX and this has greatly affected the LPO companies that rely on shipping. Just finding shipping containers themselves is virtually impossible - with most of them fully booked now 6 months out. One of the LPO companies that we work with, is now saying booking entire containers (40'x11.5'x8) that what use to cost them $1500 from China to LAX is now running $6500-$10000 due to the higher demand and container shortages.
SO if the transportation has increased sooo much why has prices pretty much only crept up?? Well the honest answer is that most of these LPO companies are making some damn good profit selling the batteries to us at what we are willing to pay for them. LPO batteries in China are SIGNIFICANTLY cheaper as you can imagine - so them eating a little bit of the shipping price - more and more - on shipping was just the cost of doing business. (Also lets face it - if they raised their prices then we just look for a lower guy. (That use to work - now it bites us in our butts because all the GRADE B's being passed off as A's)
NOW they simply cannot keep eating the costs AND pay the MUCH higher shipping rates - so we are expecting a large increase in shipping costs for the batteries to hit soonest. Of course no one on the call today could tell us what exactly that meant -- was it going to be $100 or $500 or "one million dollars" (Austin Powers) more but the days of many of these companies eating the costs are going to come to an end.
I don't see this happening overnight - BUT I do see us all looking back on all of these current prices a year from now and saying - "man if I had only stocked up" ...
The other huge issue is Christmas is coming. Any day now Home Depot and Walmart will start playing their XMAS music and the terrible looking Christmas stuff will start coming out. THAT means that YOUR battery shipments will NOW be competing with Christmas stuff to be shipped -- and guess who will win ....
((Total sidenote but our import agent told us that if you know what you are going to get ppl for Christmas you might want to start stocking up now. Of course this is only for us girls that plan this stuff out for months - and not the guys that do all the shopping on Amazon 2 days before XMAS!!))((But even Amazon is saying that they expect a large Christmas shortage due to the China shipping))
SOOO Shipping (SEA) prices are going up - the time to even get the goods out of and into a port is 2X as long - and this is not going to end well I don't think for many....
I don't see LPO prices going up to much - probably 20% by January 2022 - but the shipping costs are going to be what hurts...
Between COVID-19, COVID-D, COVID-MU, COVID-EIEIO + the US Govt printing trillions and trillions of dolalrs that is becoming more worthless every day and fueling inflation heavily -- I'm personally about to get as many batteries I can NOW for MY PERSONAL use which I think I may need in 2022.
NOW - all of the above is my personal thoughts -- I am an engineer and not an economist. Heck I'm not even sure what economist do, but I know that I am not one of them. No one should be basing their purchases on what I say - but with that said - I personally don't see things getting better any time soon - if at all.
We've got 100 days before Christmas -- and THEN we go into the Chinese New Year shortly after that .... just saying .....
One of our lead buyers that lives in China is saying that shipping cost has increased by about 300% from last year - China to LAX and this has greatly affected the LPO companies that rely on shipping. Just finding shipping containers themselves is virtually impossible - with most of them fully booked now 6 months out. One of the LPO companies that we work with, is now saying booking entire containers (40'x11.5'x8) that what use to cost them $1500 from China to LAX is now running $6500-$10000 due to the higher demand and container shortages.
SO if the transportation has increased sooo much why has prices pretty much only crept up?? Well the honest answer is that most of these LPO companies are making some damn good profit selling the batteries to us at what we are willing to pay for them. LPO batteries in China are SIGNIFICANTLY cheaper as you can imagine - so them eating a little bit of the shipping price - more and more - on shipping was just the cost of doing business. (Also lets face it - if they raised their prices then we just look for a lower guy. (That use to work - now it bites us in our butts because all the GRADE B's being passed off as A's)
NOW they simply cannot keep eating the costs AND pay the MUCH higher shipping rates - so we are expecting a large increase in shipping costs for the batteries to hit soonest. Of course no one on the call today could tell us what exactly that meant -- was it going to be $100 or $500 or "one million dollars" (Austin Powers) more but the days of many of these companies eating the costs are going to come to an end.
I don't see this happening overnight - BUT I do see us all looking back on all of these current prices a year from now and saying - "man if I had only stocked up" ...
The other huge issue is Christmas is coming. Any day now Home Depot and Walmart will start playing their XMAS music and the terrible looking Christmas stuff will start coming out. THAT means that YOUR battery shipments will NOW be competing with Christmas stuff to be shipped -- and guess who will win ....
((Total sidenote but our import agent told us that if you know what you are going to get ppl for Christmas you might want to start stocking up now. Of course this is only for us girls that plan this stuff out for months - and not the guys that do all the shopping on Amazon 2 days before XMAS!!))((But even Amazon is saying that they expect a large Christmas shortage due to the China shipping))
SOOO Shipping (SEA) prices are going up - the time to even get the goods out of and into a port is 2X as long - and this is not going to end well I don't think for many....
I don't see LPO prices going up to much - probably 20% by January 2022 - but the shipping costs are going to be what hurts...
Between COVID-19, COVID-D, COVID-MU, COVID-EIEIO + the US Govt printing trillions and trillions of dolalrs that is becoming more worthless every day and fueling inflation heavily -- I'm personally about to get as many batteries I can NOW for MY PERSONAL use which I think I may need in 2022.
NOW - all of the above is my personal thoughts -- I am an engineer and not an economist. Heck I'm not even sure what economist do, but I know that I am not one of them. No one should be basing their purchases on what I say - but with that said - I personally don't see things getting better any time soon - if at all.
We've got 100 days before Christmas -- and THEN we go into the Chinese New Year shortly after that .... just saying .....