Thread by @JohnNephew

Ugh. Seems like the freight apocalypse is only getting worse.

We are warned by our account manager about driver shortages & delays, such as: "Chicago BN (LPC) has 7,500+ containers available yet still sitting at the rail, they will not move additional containers to “available” until those sitting are picked up"

And: "What the industry hoped would be a short-term challenge is now forecasted to last much longer than expected. Due to this situation that is beyond our control, C.H. Robinson will be passing through the inland related market costs received from our drayage providers, rails,

"...and SSL’s accordingly. The supply of available equipment (locomotive & chassis) and driver capacity across all US Inland markets is insufficient to satisfy increased demand. Full container (FCL) import volumes continue to increase month over month and drayage carriers

"...servicing these inland markets have weeks of backlogged freight with an endless sea of freight arriving daily."

Yikes. Looks like we may need to assume for coming shipments that we will need to continue to have them transloaded out of their containers on the west coast, as we did with Dice Miner.

For more gloomy context, ICYMI, my earlier thread about shipping and future game prices:

https://twitter.com/JohnNephew/status/1395702519834234883

Already I think the problems with container freight is having a ripple effect on other commercial drivers and availability. The hours a commercial driver spends in line waiting for a container (and maybe going off shift w/o one) reduce the supply of trucking hours on the road.

So even with games we make domestically, or have already in our warehouse, we have to keep an eye on the prices for palletized shipments.

Meanwhile, we have an @atlasgames betting pool on the peak for a China-to-Duluth 40' FCL, between now and the end of 2022. I've placed my marker on $25,000.

We are essentially in a short squeeze on ocean container freight worldwide right now. Supply is at best fixed, if not declining (due to port congestion, Yantian shutdown, etc.); many buyers have no choice but to buy.

(If you ran a board game Kickstarter and budgeted based on what then seemed like a reasonable quote for shipping from the factory, while promising delivery of rewards in the future, you effectively short sold ocean freight. But it was not anything that seemed risky before covid.)

How this affects different companies and industries will vary. How much flexibility do they have in delivery timing? Can they wait for the bubble to burst? Are they hedged with an ability to pass cost increases along, or was the revenue side fixed in the past?

Some businesses will need to pay whatever is asked, or close their doors (permanently or temporarily) -- if you need distant raw materials to run your factory, you either pay whatever you must for them to be delivered, or you shut down operations.

Some of those businesses will continuing bidding up prices past the point where other market participants are driven to insolvency. And freight capacity is fungible, so board games are bidding for space against microchips, dried mangoes, and running shoes.

Also, FWIW, I think we are already well into "prices that won't last" territory, unless there is hyperinflation that ripples across the economy and makes everything +100% or more, which I think is unlikely. The ocean carriers are raking in the bucks, and so much $$ will attract

investment that will drive rates down. But the big unknowns are How long will this take? and When investment on the supply side delivers more capacity, how far down will it push prices? The unknowable answers to those questions will mean survival or oblivion to some companies.