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BeckyDem

(8,361 posts)
Sun Nov 21, 2021, 06:36 PM Nov 2021

Nobody involved in the supply chain crisis has much incentive to end the supply chain crisis






Supply-Chain Snarls Deliver Windfalls to Wall Street



Hedge funds cash in via appreciating stakes in container-ship companies, sales of vessels


Global supply-chain bottlenecks are creating headaches for retailers, delays for consumers—and big gains for financial firms that invested in container ships before the pandemic upended the logistics business.
https://www.wsj.com/articles/supply-chain-snarls-deliver-windfalls-to-wall-street-11637231401?mod=rss_markets_main


( I bet you're shocked.....not. )
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Nobody involved in the supply chain crisis has much incentive to end the supply chain crisis (Original Post) BeckyDem Nov 2021 OP
And why, you may ask. al bupp Nov 2021 #1
Yep. WS gets away with just about anything they want to. BeckyDem Nov 2021 #2
The best government and legal system that money can buy... al bupp Nov 2021 #3
Which is why the cargo ship backlog has consistently Igel Nov 2021 #4
Also moniss Nov 2021 #5
I Can't Agree ProfessorGAC Nov 2021 #6
Supply-Chain Snarls Deliver Windfalls to Wall Street Maxtrust Nov 2021 #7

Igel

(37,126 posts)
4. Which is why the cargo ship backlog has consistently
Sun Nov 21, 2021, 08:08 PM
Nov 2021

declined, all due to the efforts of those who, apparently, have every reason to make it worsen.

Amazing, how these supposedly smart businessmen constantly work against they're obvious(ly ascribed) self-interest.

Look, the hedge funds may find a way of making money off the cargo ship companies's grief, but the company on Amazon that's trying to sell me a Turnip Twaddler just knows that there's not a twaddler in its warehouse to sell, so it's losing revenue.

The hedge funds aren't throwing jade the way of the low-level seller.

moniss

(8,138 posts)
5. Also
Sun Nov 21, 2021, 08:41 PM
Nov 2021

the middlemen (useless skimmers) are reporting record profits. Most people don't know that much of the freight in the country can have multiple levels of "brokers" and they each take a cut. So Acme Widgets starts out paying $4.00 per mile to a freight broker who makes big promises ( or is simply giving kickbacks to someone at Acme Widgets) and has glossy promo literature. That broker simply calls another broker and tells him that he has a load that pays $3.20 per mile. So the first guy took his cut. Now the second broker calls a third broker and says that he has a load paying $2.50 per mile. so the 2nd broker took his cut. Now this last broker puts the load on a "load board/database" that truckers use and lists the freight rate as being $2.00 per mile. Finally a truck is now found and the owner will pay all of the costs for hauling the load and struggle to survive in the business. When the load is delivered the paperwork goes back up the chain of brokers until Acme Widgets gets the bill for $4.00 per mile. Then the pay flows down the chain again. The guy who actually did all the work might have to wait 60 days to get his money in some cases. But not to worry. If you need it faster they have "Quick Pay" programs where you get your money minus anything from 1 to 6 per cent. Pretty hefty skim on top of what they already take from each load. Multiple levels of brokering add nothing to the value or efficiency in moving freight. It used to be illegal but over the last several years it has been blessed by the Feds.

Now you might say maybe the trucker should be the broker and the carrier. Regulations prohibit this for several reasons one of which is that having federal authority is necessary for both brokers and carriers and they are separate and distinct in the regulations, liabilities, legal definitions of duties, insurance etc. The penalties are not inconsequential. You might also say that the trucker should deal directly with Acme Widgets. Nice idea but there are contracts that everyone has with "non-compete" clauses and remember that you don't know if someone at Acme is getting kickbacks and you don't want to get yourself involved in some underhanded dealing like that anyway. You also don't know how much the company is actually paying because the freight rate is now considered secret and is not on the shipment paperwork. It used to be a legal requirement but the big boys don't want anybody to know how big the skim really is.

Welcome to modern day trucking. I could get in to some of the outlandish/weasel like pay schemes in modern trucking but that's a whole different discussion. I could get in to how some companies have dispatchers that take kickbacks to give good loads to certain drivers. I could get in to how some shippers/consignees have forklift drivers who take kickbacks to give return loads to one over another or move one truck or another ahead in line for loading or unloading. I could get into how the dispatchers/companies lie to the drivers about the schedule for loading/unloading, getting you home for family/medical events etc. and on and on.

So when you see a report on the TV from some big trucking company about how they are short drivers just remember what I said and watch how no "reporter/host" will ask them why anybody would want to work for them when there are thousands and thousands of drivers who can tell all about how they were lied to and/or cheated.

As some in the media etc. lay some blame for high rates with the trucking industry I would simply point out that the freight rates in the Midwest that the bloodsuckers have been paying were high for awhile but now for the last 6 weeks or so they have fallen below pre-Covid levels. There are still a few loads here and there that are paying well but it is nothing like what the media and others portray it to be. When it comes to most subjects the media stumbles around like they are deaf, dumb and blind until they find a narrative that has some good video opportunities and can be presented on a 2nd grade level and then they run with that and pound it to death 24/7 until some other shiny object comes along.

ProfessorGAC

(74,661 posts)
6. I Can't Agree
Sun Nov 21, 2021, 09:00 PM
Nov 2021

While it's clear that some people are beneficiaries of the problem, people in large companies who actually work in production & logistics are measured on things like on-time delivery, days of unsold inventory in stock, & their days are filled with production planning & shipping schedules.
There are hundreds of thousands of people with a personal financial stake in helping to resolve the issues, even those not directly within their control.
Suggesting that because wall street & hedge funds are making money despite the problems ignores the simple fact that there are tons of people busting their butts to help fix this.
There are, in fact not opinion, people very motivated to get this back to normal.

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