Let's not forget competition.
If another auto manufacturer has managed their suppliers differently or is their own supplier. They do not have these increased costs (yet) and can sell at a lower price and still make a good profit. The other company with higher cost of goods is forced to sell at what the market will allow.
All costs are not passed on to the consumer but result in a lower profit. In this market that number will never be less than zero.
We are starting to see surcharges showing up from suppliers. This is a cute way of raising prices without changing the price tag. I would expect a few new ‘dealer fees’ to start showing up on the window sticker if they are not already there.
charlie hebdo I wish we had an economist in the membership. I recall something about elasticity that applies here.
I wish we had an economist in the membership. I recall something about elasticity that applies here.
Elasticity also applies to the consumers' ability to stretch their supply by doing with less when prices rise. Driving less to save gasoline cost is an example.
Elasticity of demand. A friend of ours talked to the Toyota dealer in town this week. He wants to go back to driving a sedan. Wants to go with a Camry. The dealer told him they'll be getting in TWO of them through December. Price is X dollars over MSRP. TWO. This is a high volume dealer. He's gonna stick witth what he's got, and see what condItions look like next spring/summer.
BaltACD Euclid ... Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear. Euc I don't know what world you have been living in. In this world, all costs in the chain between origin and ultimate consumer end up being passed on to that ultimate consumer. The world economic system is like a amusement ride - nobody rides for free.
Euclid ... Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear.
Euc I don't know what world you have been living in. In this world, all costs in the chain between origin and ultimate consumer end up being passed on to that ultimate consumer. The world economic system is like a amusement ride - nobody rides for free.
BaltACDIn this world, all costs in the chain between origin and ultimate consumer end up being passed on to that ultimate consumer. The world economic system is like a amusement ride - nobody rides for free.
That's right. "End user bears all costs."
The biggest problem is just getting the ships unloaded then reloaded for shipment. The problem is LA and Long Beach combined take in 40 percent of all imported goods into the USA. The supply chain can't move to a different location to spread out the volume of cargo coming in.
Yes some of the cargo can come into a different port if it's headed for say the Midwest or east coast. But the problem is that the importers have decided that it's not worth the hassle to spread out the capacity.
Where do the the 'inland ports' fit into this puzzle? I thought one of the transcons had one set up in NV? Could running a bunch of shuttle trains from LA to the inland port gain anyting, or does it just move the bottleneck east a bit?
Thanks to Chris / CopCarSS for my avatar.
SD60MAC9500 Euclid Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear. Not sure if you've been paying attention.. The average spot rate for a Transpac FEU(Forty Equivalent Unit) is above $20K.... Maersk, ONE Network, ZIM, et al. have posted record profits. As of now container lines won't be looking at any losses now or going forward.
Euclid Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear.
Not sure if you've been paying attention.. The average spot rate for a Transpac FEU(Forty Equivalent Unit) is above $20K.... Maersk, ONE Network, ZIM, et al. have posted record profits.
As of now container lines won't be looking at any losses now or going forward.
Euclid I think you are stereotyping consumer behavior when you say they don’t have the will to refuse a price they feel is too high for them. It is a fundamental truth of economics that (all other things being equal) as a product price rises, the demand for that product will fall. Therefore, price is most definitely a factor in supply and demand. That is why they always refer to pricing product at the highest price that the market will bear. If price is not a factor, why don’t grocery stores just double their prices today? Do they not want a higher income?
greyhounds zugmann The blip came back, it seems. I don't get it. Are you having trouble getting TP? It seems to be in good supply here.
zugmann The blip came back, it seems. I don't get it.
Are you having trouble getting TP? It seems to be in good supply here.
Euclid... Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear.
Never too old to have a happy childhood!
zugmannThe blip came back, it seems. I don't get it.
And then there is the three corn cob solution, with one cob being white.
Murphy SidingSo you quit buying toilet paper when the price got too high?
Never a shortage of junk mail, so it seems.
greyhoundsDealing with a blip such as TP hoarding is just that, a temporary blip.
The blip came back, it seems.
I don't get it.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
"Toilet paper? Toilet paper! We don't need no steekin' toilet paper."
At least that's what the ad I saw last night on TV said. Never buy toilet paprt again.
OMIGO Element Bidet Toilet Seat Attachment – Omigo (myomigo.com)
Jeff
Had to revert to using lettuce. Today was just the tip of the iceberg. Tomorrow romaines to be seen...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
jeffhergert One person's luxury is another person's necessity. Through the miracle of advertising, many luxury items are now viewed as necessities. For some items demand will come down as prices rise, but not for others. For some items it won't be because people decide that, "I'm not going to pay those kind of prices." but rather, "I can't pay those kind of prices." Jeff
One person's luxury is another person's necessity.
Through the miracle of advertising, many luxury items are now viewed as necessities.
For some items demand will come down as prices rise, but not for others. For some items it won't be because people decide that, "I'm not going to pay those kind of prices." but rather, "I can't pay those kind of prices."
Euclid Murphy Siding Euclid But the video does make one point that I find very interesting. It points to the massive cost of idling many dozens of container ships waiting for access to the ports, and it says this cost will have to be passed on to the consumers. Yet while consumers are powerless to prevent this, they do have the power to refuse purchase of items that have been absurdly overpriced to pay for the parked container ships. Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear. In the end, the cost always gets passed on to the consumer. It's all about supply and demand. You say that American consumers have the power to refuse purchase of items... Yes, technically, but I think most don't have the will to do that. A woman I work with was fretting about constant news stories that "OMG!! there might not be any toys for Christmas this year." (I suggested she just re-wrap the junk from last year. That wasn't the reaction she was looking for). I think you are stereotyping consumer behavior when you say they don’t have the will to refuse a price they feel is too high for them. It is a fundamental truth of economics that (all other things being equal) as a product price rises, the demand for that product will fall. Therefore, price is most definitely a factor in supply and demand. That is why they always refer to pricing product at the highest price that the market will bear. If price is not a factor, why don’t grocery stores just double their prices today? Do they not want a higher income? Quote from one reference: What is relationship between price and demand? Thus, the price of a product and the quantity demanded for that product have an inverse relationship, as stated in the law of demand. An inverse relationship means that higher prices result in lower quantity demand and lower prices result in higher quantity demand.
Murphy Siding Euclid But the video does make one point that I find very interesting. It points to the massive cost of idling many dozens of container ships waiting for access to the ports, and it says this cost will have to be passed on to the consumers. Yet while consumers are powerless to prevent this, they do have the power to refuse purchase of items that have been absurdly overpriced to pay for the parked container ships. Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear. In the end, the cost always gets passed on to the consumer. It's all about supply and demand. You say that American consumers have the power to refuse purchase of items... Yes, technically, but I think most don't have the will to do that. A woman I work with was fretting about constant news stories that "OMG!! there might not be any toys for Christmas this year." (I suggested she just re-wrap the junk from last year. That wasn't the reaction she was looking for).
Euclid But the video does make one point that I find very interesting. It points to the massive cost of idling many dozens of container ships waiting for access to the ports, and it says this cost will have to be passed on to the consumers. Yet while consumers are powerless to prevent this, they do have the power to refuse purchase of items that have been absurdly overpriced to pay for the parked container ships. Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear.
In the end, the cost always gets passed on to the consumer. It's all about supply and demand. You say that American consumers have the power to refuse purchase of items... Yes, technically, but I think most don't have the will to do that. A woman I work with was fretting about constant news stories that "OMG!! there might not be any toys for Christmas this year." (I suggested she just re-wrap the junk from last year. That wasn't the reaction she was looking for).
EuclidI think you are stereotyping consumer behavior when you say they don’t have the will to refuse a price they feel is too high for them.
I think he has a point. Ego is a big part of it. "Oh, won't the Joneses be impressed when they see that I have the latest trinket?" etc.
I think it's become a compulsion, at least for some.
Murphy Siding You say that American consumers have the power to refuse purchase of items... Yes, technically, but I think most don't have the will to do that.
It's amusing how over the years I often used a convoluted logic when buying big ticket consumer items that "some day when society collapses, things like this will be priceless/unobtainable" (therefore worth buying the best "now" )....and here just a mere 50 years later, it's coming to pass.
It's really amazing how few things that I really have to purchase. Food? yes. Utilities? yes. Gasoline? I get by on about a tank and a quarter per month.
So, I guess we're down to razor blades, soap, and Dr Pepper being my discretionary "luxuries"?
I think we as a society are brainwashed into being compulsive consumers.
Euclid The central question with the supply chain crisis seeks an explanation of the cause. Some explanations attempt to boil it down to one central cause, but that often seems too simple to be convincing. However, another approach finds a gigantic collection of causes that just happened to come together at the same time like the so-called “perfect storm.” Here is one of those: https://www.youtube.com/watch?v=E7t5yj1rScI&t=214s This multifaceted cause even includes the Chinese tariffs placed in 1919, and the grounding of the Ever Given container ship in the Suez Canal. It is a highly complex cause that also has a complex solution such as battery powered, autonomous container ships. Common sense says a cause this big will not be solved by a direct action. It will just have to heal naturally with time. But the video does make one point that I find very interesting. It points to the massive cost of idling many dozens of container ships waiting for access to the ports, and it says this cost will have to be passed on to the consumers. Yet while consumers are powerless to prevent this, they do have the power to refuse purchase of items that have been absurdly overpriced to pay for the parked container ships. Therefore, it is unlikely that the cost of stalled container ships will be passed onto the consumer. These costs will be suffered as a loss to the industry. Perhaps these losses will be recouped over time as the shipping industry gradually raises shipping costs at a rate the customer can bear.
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BaltACD In my circle of acquaintance are several crane operators. If and when they make a mistake there is either serious financial consequence, death(s) or both. And it doesn't have to be a big mistake. Swinging 40 foot 30+ ton boxes around the waterfront is not for the unskilled, weak of heart or those that can't maintain concentration. So crane operators get paid for their skils and the risks they accept - they have earned it.
In my circle of acquaintance are several crane operators. If and when they make a mistake there is either serious financial consequence, death(s) or both. And it doesn't have to be a big mistake. Swinging 40 foot 30+ ton boxes around the waterfront is not for the unskilled, weak of heart or those that can't maintain concentration. So crane operators get paid for their skils and the risks they accept - they have earned it.
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