One Thing I Bet You Didn’t Know About Black Friday

Co Authored with Eytan Buchman of Freightos

I see you. You’re prepping for Black Friday. You, reading this blog post is probably getting in the way of that cataloged laundry list you’re compiling – detailing what websites you’ll hit up at midnight tonight – and what stores you’ll be waiting around the corner to get into in the wee hours of the morning. Though, times they are a changin’. I bet you thought you knew all there was to know about Black Friday. Perhaps you once wrestled a 90-year old woman to the ground for that last discounted sweater at Sears or participated in a flash mob running into J. C. Penney at 4 a.m. Well, here’s something I bet you didn’t know about Black Friday and it’s going to surprise the bejesus out of you.

That 55" TV at Best Buy this Friday? The one that costs only $480?

It was the gift of the ocean. Seriously.

Have you ever stopped to wonder how a television that big can be shipped all the way from Korea to the United States and still cost so little? Once that TV is assembled, someone needs to package them onto pallets, put the pallets into containers, get those on trucks, onto a ship, off the ship, onto another truck...It's complicated.

Now hold that thought.

Once that TV goes up for sale online, in time for Black Friday, you or I can click a button and buy it online. If you check out the UPS website, you'll see it costs about $80 dollars to overnight that TV from a warehouse in New Jersey to New York, in time to make it back to you for Sunday Night football. Remember that number - $80.

Because here's the kicker.

It costs only $18 for a large retailer to import that TV from a warehouse in Korea to a warehouse in New Jersey. $80 from New Jersey to New York, $18 from Asia to the United States. Because ocean freight is crazy cheap. And this year, prices hit rock bottom.

See, the largest container ships coming off the line can hold 20,000 freight containers. They're huge. And their sheer size is causing huge problems for ocean liners.

Container ships are kind of like whiskey.

If demand for a 12 year Lagavulin skyrockets, it takes a decade or so before everyone's favorite single malt distillery can produce enough to meet demand. Manufacturing huge steel behemoths takes time too. So eight years ago, when the economy was flourishing, more and more orders for ocean liners came in.

But there's way too much Johnny Black to go around right now.

And then economy tanked. Well, at least the growth of the economy growth tanked.

As a result, a full 10% of the global ocean liner capacity isn't being used. If 10% of Delta's airplanes weren't being used, they would not be long for this world. It's no different for ocean liners. In late August, a South Korean ocean carrier called Hanjin went out of business, driven into bankruptcy by dropping profitability. Since Hanjin carried roughly 8% of all US imports from South-East Asia, it suddenly became way more expensive to import from Asia, and prices started to climb.

But even "expensive" ocean shipping prices are still dirt cheap. Prices have finally almost climbed back to what they were at the beginning of the year...but it still only costs pennies to import DVDs or dollars to import a laptop.

The upside is that the global economy is more connected than ever. A brand new Macbook costs about $1,800. Importing costs for a full container of Macbooks costs only about $2,500 (even though laptops are generally imported with more expensive air shipping). You can source goods online with Alibaba, import goods with companies like Freightos and sell goods online with Amazon FBA.

Buy for ocean liners, it's choppy waters. Cut-throat prices and oversupply are endangering their future. Maersk, the world's largest ocean liner, which controls over 15% of the global container fleet, saw profits drop significantly in 2015. And more carriers are wary of the future.

So, yes, there are some more ominous undertones behind that cheap ocean importing. For the time being, prices are relatively high - and will likely stay that way, due to a seasonal crunch that typically takes place leading up to the Chinese New Year. But once demand drops again in February, it's anyone’s game.

But for now, enjoy your turkey, your single malt and your incredibly cheap Black Friday goodies.

Happy hunting!

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.