Domain Daily: Ships and Canoos

The Dose

  • Cheaper Containers

  • Walmart Goes Electric

  • Peloton Pivot


Shipping Rates Are Falling

According to Slate, the cost of shipping a container from China to the U.S. has dropped from $20,000 to $8,000.

The Point: Guessing when inflation will peak is a popular parlor game right now. While it's anyone's guess when we'll see prices plateau, the plunge in shipping prices could be a sign that the worst is over. In addition, Flexport, a global freight company, said transit times are down by 35%. But before we all get too excited, it should be noted that the $8,000 per container cost is four times more than the pre-pandemic average. Still, it's a bit of sorely needed good news and worth keeping in mind as we process the latest inflation reading of 9.1%.

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Walmart Reaches Agreement With EV Maker Canoo

The retailer will buy 4,500 electric delivery vans from Canoo, a Bentonville, Arkansas-based automaker.

The Point: Canoo's stock price surged by more than 70% on the news. Walmart is buying the vans to beef up its local delivery services. The two companies said that they expect the electric fleet to hit the road in 2023. The deal comes just in the nick of time for Canoo. Just two short months ago, the automaker was warning investors that it might not have the capital required to deliver its products to market.  

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Peloton Pivots By Outsourcing Equipment Manufacturing

The fitness company said Tuesday that it would no longer build its equipment. The flip to outsourcing its products is part of the company's turnaround strategy.  

The Point: Peloton is trying to right the ship. The company saw surging demand for its products during Covid-19 lockdowns, but fewer people wanted to spend thousands of dollars on at-home fitness equipment as the world opened back up. So as part of its turnaround strategy, the company has hired a new CEO. Now, to conserve cash, it's outsourcing manufacturing. "We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility," Peloton's CEO Barry McCarthy said in a statement. That's a significant change from the company's prior business model. McCarthy envisions Peloton as a subscription service rather than as a manufacturer. If all goes to plan, that probably means higher margins on what Peloton sells (subscriptions) but possibly less overall revenue.

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