Now that the rush is over and we are (mostly) out of stock, it’s time to consider some developments that will likely impact our business in 2011.
The first is the economics of ocean shipping. As you may know, we import most of our manufactured statues from the Philippines and China by shipping container. After a disastrous 2009 where the ocean shipping industry claimed losses of US$ 15 Billion, they started their recovery by raising rates by more than 25% in 2010. With tight capacity, these rates held in 2010. They are now proposing increases for 2011 of as much as 18% for high season (June15 to Nov30) container shipping.
There are two factors impacting this proposal. The first is reported by The Economist magazine on Jan 1, 2011, regarding growth in the world’s fleet of cargo ships. Growth in capacity for all forms of cargo shipping has stayed high despite the word wide recession. Even though world seaborne trade declined by 4.5% in 2009, the world’s merchant fleet grew by 7%. For 2011, container ship capacity is forecast to grow by 50 million tonnes. Offsetting this increase in ship capacity is the continued shortage of new steel shipping containers.
More on this as the season proceeds. In the meantime we have to err on the side of caution in our cost forecasts