Much of the scrap metal is remade into steel rolls which return to America only to be sold at below market prices. It has a huge effect upon the locally made product being able to be sold at all let alone a competitive price because the Chinese literally dump the steel into our market. Again, when you consider the cost of shipping to and from China it beats me why steel mills here cannot absorb the millions of tons of scrap metal and manufacture the steel in America. Maybe then we could start give China back some of their own medicine and start dumping it into the Chinese market.

Growing up in New Zealand the only quality towels we would buy were the American-made Cannon brand. It is now almost impossible to buy an American produced towel in this country anymore. Why do we export cotton only to have it shipped back in finished form? Turning cotton into fabric and then into towels is literally 100% accomplished by machine so the differential in manufacturing costs between China and the United States would be negligible. However there would be huge savings removing the international shipping costs and the consequent delay in getting the finished goods to market that I believe the American-made towels would actually retail cheaper than the imported equivalent.

Presently the insult to injury affecting our exports is a shortage of containers due to the shipping lines reducing capacity. Shipping lines need exports of value to start entering the westbound trade. Shipping commodities of little value is not a solution for export growth. In fact because scrap is a twelve month a year export with containers being loaded close to port, shipping lines are not interested in the time consuming and costly job of positioning containers to inland points for manufacturers entering the export business. Ships are great pollutants in port and at sea. For the sake of our environment more than anything else, international trade should be about moving goods that are needed, not crap that isn’t. Add to this, returning to a philosophy of making as much as we can in America for our home market made good sense. No American city would be allowed to emit pollution like its Asian equivalent.

Never in the history of aviation between the two countries have fares been so low and still flights are departing half full. Showman, Richard Branson, may have bitten off more than he can chew here. First of all, he is a bit of a Donald Trump. He doesn’t exactly use his own money and that being the case, his backers may have a different view from him into how much of a loss the airline can sustain before they will want to pull the pin. With Delta, they are so used to bankruptcy, so it is a slightly different case. Once upon a time Continental and Pan Am (United bought the Pacific routes in the eighties) ruled the skies to the South Pacific and Delta, now the world’s largest carrier, feels it can pick up that mantle once again. American carriers have an advantage that reorganizing in bankruptcy is a “piece of cake” so the decision for Delta to fly where they have never done so before was done on the basis that commercial considerations obviously took second place. If it fails, bankruptcy is an easy option out!

My belief is Virgin will not last very long and Delta, just like Continental, Northwest and America, will pump a fortune into promoting the route only to fail like their three predecessors. Qantas will prevail, because it possesses the image of the most successful international regional carrier in the world, something that Dickson a couple of years ago set out to destroy.

Now international travel is on a huge decline, the future looks bleak for over half the world’s carriers. Instead of mergers like KLM and Air France, Lufthansa and British Midland most of the terminally ill carriers will simply shut shop. Mojave Desert, already overflowing with unwanted planes will within a couple of years be overflowing with repossessed aircraft from the Asian and African continents. There will be more airline people joining the dole queue than from the auto industry! My thoughts are before this recession is over the number of carriers still operating will be at least halved from the boom times of post 9/11.

Surviving airlines hoping that with less competition they will able to hike the prices will be in for a rude awakening. The western world, especially America will only contemplate travel if the price is right. No more banging a $12,000 family vacation onto the plastic card anymore and spending two years paying it off at 15.99% compounded interest. We will follow the Chinese and all our spending decisions will be based upon three basic considerations; price, price and price.

As for cargo, there may some markets not well serviced by freighters or competing airlines, where the demand will dictate pricing levels, but overall, most passenger carriers will continue to “drop their pants” because they absolutely need the incremental revenue that cargo brings. Some forwarder mentioned to us the other day he received a minus rate into Asia! Believe that! I do because Asian carriers are truly hurting and will for a long time. They can maintain the fuel surcharge at inflated levels but are will to discount that in order to move freight at a zero rate! Talk about how the world has been moving to the lowest common denominator. Who knows, the barter system of the Stone Age may return as the bargaining tool to do business.