Gong Qing, the general manager of marketing for China Shipping Container lines, is reported to have admitted knowing:
• that the downturn in the U.S. economy was bringing about a negative effect on volume,
• that the “fuel issue” was constantly in the background,
• that his company had to pay the railroads and their floating bunker charge,
• and that high fuel prices will add a cost on products,
…but then he states that, “the next six months to a year will be difficult in terms of volume growth, but things should perk up in a year or two”.
Mr. Gong, like everyone else, doesn’t justify his rosy prediction. He just knows, like everyone else, that recessions and depressions always come to an end … somehow. It’s a cyclical thing. It’s just nature’s way. Ask anybody.
According to the report, Mr. Gong said that, “in the short term, carriers cannot expect shippers to completely cover the additional cost of fuel, but shippers must be willing to share in the burden in the near future, as they consign themselves to the realization that long-haul transportation is just getting more expensive”.
“Shippers”, of course, are always “willing to share in the burden” because the eventual cost is passed through to the end user – the U.S. consumer. But there’s an old saying about killing the goose that lays the golden egg, and that golden goose – the U.S. consumer – is now a corpse. And if Mr. Gong is not aware of our agonizing demise, he should check with the following distributors:
• Home Depot. Closing 15 stores and cancelling its plans to open 50 new ones.
• Ann Taylor. Closing 117 stores.
• Foot Locker. Closing 140 stores.
• Zales. Closing 100 stores.
• Wilsons. Closing 158 stores.
• Pacific Sunwear. Closing 153 stores.
• Disney. Closing 98 stores.
How’s that for starters, Mr. Gong? Those stores are closing because the consumers you hope will be footing your fuel bill are no longer consuming, and the International Council of Shopping Centers predicts that things will get even worse. There were 4,603 closures in 2007, the Council revealed, and 5,770 more stores will close in 2008. So tell us, how will things “perk up in a year or two”?
It’s becoming obvious that the buying power of the U.S. consumer had supported and promoted the economic growth of the whole world – just as Lenin said it would, remember?
– but Lenin didn’t know about the golden goose, either.