Western Steel & Wire procures containers of wire from our international wire mills. This requires ocean freight to get it here. We have seen ocean freight fluctuate as much as 6 X in just one year. In addition to costs, it is exceedingly difficult to secure ocean vessel space given high demands. We have placed orders with some of our S. Korean mills, only to receive the wire six months later. Often our mills will have the material available for pickup, but there is no available ocean vessel space.
Yes, I know what you are thinking, order more from domestic mills. We also order from domestic mills, but guess what, they know the international situation and they take advantage; they raise their prices and because customers do not want to wait, these mills are at full capacity; these mills often refuse orders or quote just as long of lead times as international mills.
The reasons for price and capacity issues in ocean freight are many and not the main theme of this blog. I am a strong supporter of capitalism; every organization owes its stakeholders a reasonable profit and it’s employees a reasonable compensation. But what is reasonable? It appears the ocean freight folks have taken capitalism to the extreme. Check out the following article and let me know your thoughts.