Issue link: https://iconnect007.uberflip.com/i/1494936
22 PCB007 MAGAZINE I MARCH 2023 the ships. Because of the Chi- nese lockdowns, demand was low, and this is still going on in the world. My point is that we're a long way from normality. I don't think anybody knows when or where the "new normal" will set in, because these guys have gotten used to higher prices. Nobody will keep the prices up at $16,000 or $18,000 a container, but I don't think prices will be com- ing back to the levels we're currently seeing in the spot market either. I think it will be some- where between the two. ey're already blank- ing sailings; the next thing they'll do is take out services. ey will manage the capacity to keep the price at a sustainable level. e rates we're seeing now are unsustainable. Alun Morgan: Did you have some comments on the specialty containers? Like the reefers, for example? Goodwin: It's true that when it comes to the 20-foot GP containers, we're seeing prices below pre-pandemic, but that's unsustain- able and not real. In fact, if you read the Ship- ping Press, they're saying, "is is screwed up; this is an inverted market, and unsustainable." Reefer containers have not come down to pre- pandemic levels, so for shipping prepregs and specialty products that need temperature con- trol, you are looking at prices that are still 50%, even 100% higher than pre-pandemic levels. Now, if you look at volumes in Europe and the U.S. that are sourced from Asia, oen we need to ship containers of mixed laminate prepreg to make the supply chains work. We've still got to pay. We can't put prepreg in a GP container. We have to put prepreg in a refrigerated con- tainer, so we have to pay those prices. Also, we got a bullwhip effect in inventory. Aer the pandemic, Ventec worked very hard to make sure that we kept our customers sup- plied. We ran out of very few things. e flip side of that coin was I had to charge people what I did because of the cost of logis- tics, and my argument was that the highest cost of all is having no flour to make bread. Without laminate, you can't make a cir- cuit board, so you might not like my price, but you must like the fact that I've got it available. Yeah, so we kept the availabil- ity. Now, of course, the market has slowed down faster than we can reduce the flow in the supply pipeline, so we've got high inventory. With the market in Asia, the price for laminate has bottomed out and is now starting to increase again. We'll get on to that later in this conversation. What's happened is inventories are high in the West. e price has bottomed out in Asia, but we're still bringing high-priced inventories down in the West. By the time we start topping those invento- ries up again, we won't be topping them up at the bottom of the market. We'll be back some- where on the upswing on pricing. Now, you can argue that we should sell at a cheaper price. We can do whatever we decide to. We can liq- uidate stuff. We can do whatever, but the true cost—somebody somewhere has to absorb that. Yeah, some might call it inefficiency, but that's the built-in structural costs that are a part of any business—whether you're Ventec or any other laminate supplier—our supply chains start in Asia. I ship finished goods from Asia. ere are North American and European manufactur- ers who also ship prepreg from Asia because they don't have treaters in some of their mar- kets. When you have a factory without treat- ers you have to ship prepreg along with copper foil, but these are all just different inventories at different parts of the manufacturing process. We've all got this bullwhip effect; we've all got inventories at various cost points and various logistics cost points. Mark Goodwin