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We Didn't Need A Bigger Boat
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The game is changing, and some businesses just aren't keeping pace. Take the shipping industry, which thought that as the economy improved, business would rebound and grow. So they invested in more and bigger ships, and then the amount of goods being shipped stopped growing, and now you have Hanjin bankrupt and ships sitting in the water full of containers and unable to dock and an industry set to lose $5 billion this year. They overbuilt, in a manner of speaking, with way more capacity than needed, and that drove shipping prices down and it's been catastrophic for the shippers... but not their customers, who are reaping the benefit of insanely low international shipping costs. The shipping industry is trying to fix things, reducing capacity and raising rates, but it may be too late for some of the companies. (Los Angeles Times)
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