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Apple's iPad 3 Launch Putting Squeeze on Freight Shipments from China

serferthom said:
Yep yep totally agree. Why the heck would u want to ship out millions of product by some boat that takes 16 weeks to get somewhere. Apple is not that dum!
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Apart from the fact that it would totally destroy their launch plans, take the cost: One iPad = say $500. At 6 percent interest, or $30 per year, having an iPad on a boat for 16 weeks costs about $9 in interest for the money invested. For 20 million iPads, that's $180 million. You can pay for an awful lot of airfreight with $180 million.
 
MacRumors said:
One shipping representative told MacRumors last week that his freight broker in China has been scrambling to find space for his company's shipments, with shipping rates rising 20% in one week as Apple has snapped up available capacity at premium rates. Another shipping manager told us a similar story today, with his company being unable to find space with its usual carrier due to Apple's demand and having to scramble to find alternatives for moving products overseas.
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Translation: We schedule our JIT freight on an on-demand basis because it is convenient and we usually get away with it, but we never saw this coming and now that Apple has bought up air freight capacity, we're screwed. LOL!

This reminds me of the manufacturers who buy their memory on the open market or who contract their touch screen manufacturing on an as-needed basis.
 
gnasher729 said:
Apart from the fact that it would totally destroy their launch plans, take the cost: One iPad = say $500. At 6 percent interest, or $30 per year, having an iPad on a boat for 16 weeks costs about $9 in interest for the money invested. For 20 million iPads, that's $180 million. You can pay for an awful lot of airfreight with $180 million.
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If you can get a 6% return on a short term marketable security, you need to share that info with the rest of us.
 
gnasher729 said:
Apart from the fact that it would totally destroy their launch plans, take the cost: One iPad = say $500. At 6 percent interest, or $30 per year, having an iPad on a boat for 16 weeks costs about $9 in interest for the money invested. For 20 million iPads, that's $180 million. You can pay for an awful lot of airfreight with $180 million.
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China>US expedited ocean freight is between 3 and 4 weeks.


It's also likely that the squeeze on freighter space is due to depressed air freight demand from China. During the past few years, ocean rates have plummeted so those who can afford to, put their freight on a boat instead. I'm sure that's ended up mothballing a few air cargo freighters.

This also points to the fact that the launch of the iPad has been set if not in stone, then at least in fast hardening plaster for a few months now. You don't just charter that many air cargo freighters overnight.
 
Does this mean there won't be preorders? Usually with preorder system Apple ships iPhone from China to your house directly. If they are shipping these boxes to Apple right now that means it will be available on launch day at Apple stores only. :(
 
rnizlek said:
Whoever said it was an American purchaser? I actually sell a significant amount of my old Apple products on eBay outside the US. It seems when I open the bidding to int'l buyers I get much better prices, even though they have to pay a lot more for shipping.
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I didn't think you did say it was an American purchaser. I guess you know, since you have to send it to the buyer.

I guess my point is that the only logical way these resale prices could be supported is that the buyer is comparing your price to the Apple price which includes some currency markup and higher tax. I just could not see someone taking the risk of buying on ebay, getting a used and possibly dinged up product, just to save $150 on a $650 purchase. This must be a buyer who would have paid $900 or something like that if they had ordered the iPad 2 from Apple. Then I guess it makes sense because that buyer is saving 40% or so. I just don't think you go to the used market like Ebay unless you are getting something better than a 20% savings. The risk, hassle and reduced warranty just isn't worth it.
 
dojoman said:
Does this mean there won't be preorders? Usually with preorder system Apple ships iPhone from China to your house directly. If they are shipping these boxes to Apple right now that means it will be available on launch day at Apple stores only. :(
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It's possible they make it available for sale on the 9th, but of course, nobody knows.
 
I really can't believe this due to the sheer size of the Chinese air freight industry. Look at flights from China to my home of Chicago for example. We get dedicated 744F air service from Air China Cargo, China Southern, Yangtze River Express, China Cargo Airlines, and China Airlines. All of these airlines have multiple weekly flights, and this is in addition to several daily PAX flights that also sell freight capacity, such as AA and UA with 777's. Additionally, customers could also send freight to neighboring countries, such Hong Kong or Taiwan, as we also have a daily flights from both of those. Cathay Pacific sends both a daily all freight 747F, and a PAX 777 flight from Hong Kong, UPS sends an MD-11, and Cargolux sends a daily 744F. EVA Air sends either or both a 747F or MD-11 from Taipei. Now according to my research, about 10 iPads equals about 1 cubic foot. According to Cargolux, a single 747F holds about 26000 cubic ft, or 260000 iPads. Bear in mind we get at least 30 of these a week so they could send over 7 million iPads a week. Is this really not enough lol?
 
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Ugg said:
It's possible they make it available for sale on the 9th, but of course, nobody knows.
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I think me and everyone else would want for the product to be released on march 9th but it wouldn't make logic sense, because stores need time to put the schedule together, change themes product and etc and doing that all in 2 days seems to short. And apple is not like that they usually wait at least a week to be all prepared. At same time waiting a week would also build more media for the release date!!!
 
supply and demand

the fact that one company has almost crippled any shipping in one country is just astounding to me....but what does this mean to me the consumer, it means apple is doing something different than the past, there has always been a supply and demand gap in apple, be it the iphone, iPad etc,,, I think apple will surprise us all and make it available same day as announcement! i can remember a time when steve came out and said " you can buy it today!" Since that time it has been a long time off. This could be a resurgence of the apple of yor!

I will be in line as always! "lots of love steve RIP!"
 
5aga said:
probably has to do with Congress wanting to investigate Apple and google. The MSM always picks a good time to report negative stuff about Apple (2 days before a major product announcement lol)
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The easiest and best way to be wrong about why the markets do what they do on any given day is to think you know why they do what they do on any given day.
 
iphoneication said:
the fact that one company has almost crippled any shipping in one country is just astounding to me....but what does this mean to me the consumer, it means apple is doing something different than the past, there has always been a supply and demand gap in apple, be it the iphone, iPad etc,,, I think apple will surprise us all and make it available same day as announcement! i can remember a time when steve came out and said " you can buy it today!" Since that time it has been a long time off. This could be a resurgence of the apple of yor!

I will be in line as always! "lots of love steve RIP!"
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i Highly doubt it will be available same day. Product lunches needs to be fun not here is the iPad and cya!
 
Ugg said:
That would be great but I'm hoping for a release date of the 16th. It fits my schedule better:D
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My iPad 2 is up for auction now, if it's the 16 I'll have to go a whole week iPad less :-/

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serferthom said:
that would be so crazy if they did that. The stores wouldn't even have time to get ready for it!
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Yeah unless they start getting ready for it today :) lol
 
kdarling said:
Definitely a lot of items to ship in a short time period by air.

No doubt there's still tons of room on cargo ships.

If they simply starting shipping a bit further ahead of the public debut, there'd be less problem.
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AAPL is not having a problem. They will get every Air Freighter they need at the rates they are paying. "We are not just sitting on our cash reserves". Air Freight is more secure. Anytime you involve Docks and Container Ships your Risk Factor increases significantly. Of course, the trade off is the shipping rate.

Yeah, the carbon footprint will go up for a couple months. In the end only one item matters.

"It is good to be King". :apple:
 
nickn said:
I really can't believe this due to the sheer size of the Chinese air freight industry. Look at flights from China to my home of Chicago for example. We get dedicated 744F air service from Air China Cargo, China Southern, Yangtze River Express, China Cargo Airlines, and China Airlines. All of these airlines have multiple weekly flights, and this is in addition to several daily PAX flights that also sell freight capacity, such as AA and UA with 777's. Additionally, customers could also send freight to neighboring countries, such Hong Kong or Taiwan, as we also have a daily flights from both of those. Cathay Pacific sends both a daily all freight 747F, and a PAX 777 flight from Hong Kong, UPS sends an MD-11, and Cargolux sends a daily 744F. EVA Air sends either or both a 747F or MD-11 from Taipei. Now according to my research, about 10 iPads equals about 1 cubic foot. According to Cargolux, a single 747F holds about 26000 cubic ft, or 260000 iPads. Bear in mind we get at least 30 of these a week so they could send over 7 million iPads a week. Is this really not enough lol?
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You are assuming that those planes are sitting empty waiting for the day's orders. Most of the space is going to be booked in advance. The point is that Apple is using up the short term space and those without long term contracts are feeling the squeeze. It is a short term spike, not the normal capacity, that is causing the issues.
 
Generous apple is again offering jobs to people, ship workers, ship owners, and of course the people who built and those who repair the ships.
 
TallManNY said:
I didn't think you did say it was an American purchaser. I guess you know, since you have to send it to the buyer.

I guess my point is that the only logical way these resale prices could be supported is that the buyer is comparing your price to the Apple price which includes some currency markup and higher tax. I just could not see someone taking the risk of buying on ebay, getting a used and possibly dinged up product, just to save $150 on a $650 purchase. This must be a buyer who would have paid $900 or something like that if they had ordered the iPad 2 from Apple. Then I guess it makes sense because that buyer is saving 40% or so. I just don't think you go to the used market like Ebay unless you are getting something better than a 20% savings. The risk, hassle and reduced warranty just isn't worth it.
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You're not accounting for the huge numbers of people operating stolen Paypal accounts and stolen/cloned credit and debit cards. Ebay's their playground.
 
I hope Canada is going to be one of the countries where the ipad is released first!!

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blow45 said:
Generous apple is again offering jobs to people, ship workers, ship owners, and of course the people who built and those who repair the ships.
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Ships?? Who uses slow as snails SHIPS?
Apple, like all smart companies, uses AIR frieght.
 
Dionte said:
Come on March 9th release date.
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Uh, they are NOT going to release it two days after the launch event. It's possible it won't even be the next Friday, though it could be. What I hope for is that unlike the iPad 2, they will allow online pre-orders.
 
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