It all depends on your income and how sustainable it is for as if you read The Price of a Bargain – The Quest for Cheap and the Death of Globalization by Gordon Laird published by McClelland and Stewart Ltd, Toronto, 2009. If your income is over the average then the price of a bargain is a good thing. One of the reasons for the growth of bargain world is containers. In 1956 Malcolm McLean sent the first ship of containers from Newark to Houston – the cost dropped from $5.83 per cargo ton to 16 cents a ton. From 1959 to 1976 the productivity of the shipping industry increased 6,752%. Average port time shrunk from 3 weeks to 18 hours. The world had changed.

To look at containers the best port is the Port of Long Beach because of railways and the trucking industry centered in Los Angles, the ships come in and goods are transferred and go across America to the markets. In 2003 the 12 importers of containers at LA/Long Beach were all major retailers and discounters – Wal-Mart, Home Depot, Target. Lowe’s, Kmart, IKEA, Payless Shoes, Pier 1, Big Lots, Toy “R” Us, Limited Brands and Michaels. In all likelihood a place where you have shopped. Chicago receives 60% of its imported goods through LA. The big issue is not the stuff inside but after the containers are empty they are returned – sometimes there is waste paper, scrap metal, hay going back but the industry spends $ 11 billion moving empty containers around the world.

To deal with all the containers GPS-based tracking, bar-code links, Web-based management systems were used to improve the logistics of moving things. These can be very beneficial and allowed companies to create alliances with suppliers to share information to make ordering, inventory and accounting more automatic. The changes lead to some cities and countries making investments to handle the trade and others not. Which is both a good and bad thing. If cities make investments, they have to continue to upgrade or they will be bypassed by someone else that does. Expanding in a tight spot can be tough without the government overriding other concerns.

Linking to dividend paying stocks, discounters is a race to high volume and lower margins; while interesting to observer, these companies will have a hard time to continually make profits and pay dividends. An alternative is to look at the suppliers of the software to make profits from the value added.

There are more questions than answers, till next time – to raising questions.