9 ms·

Cheap oil is taking shipping routes back to the 1800s

140 points by altstar 11y ago

gleenn 11y ago
Really sad that economics makes a bunch of massive ships travel thousands of miles out of their way, burning tons of extra fuel, just because a bunch of guys charge way too much to drive through a canal that was built a long time ago.
- dmm 11y ago
  Markets provide price discovery and efficient[0] prices are very valuable. In that sense it's not a waste. Is this even a significant phenomenon? The article mentions 100 ships going the long way but wikipedia says the Suez averages 46 ships per day, or more than 16,500 per year. [0] The definition of efficient in economics is roughly "It's not possible to make anyone better off without making someone else worse off".
  - Amorymeltzer 11y ago
    >Over 100 ships did this between late October 2015 and the end of the year. That's somewhere between 1 and 1.5 ships a day, which is between 2-3% of daily entrance figures. That's certainly not nothing.
    - esmi 11y ago
      But it's also not "taking shipping routes back to the 1800s".
  - pcarolan 11y ago
    I think he means waste as in unaccounted externalities such as putting co2 into the atmosphere without paying the social costs.
  - davidw 11y ago
    > The definition of efficient in economics is roughly "It's not possible to make anyone better off without making someone else worse off" That's a terrible definition, because a lot of the economy is not a zero sum game, and it's hard enough as it is to break people out of that kind of thinking.
    - deleted 11y ago
      [deleted]
    - gozur88 11y ago
      Beyond the macroeconomics, two people will not agree on a price unless in doing so they'll both be better off in some way.
    - eru 11y ago
      Oh, dmm is just defining pareto efficiency. Said in a more positive light: `a situation is pareto efficient if all mutually beneficial transactions have been done.' (And thus in dmm's words, only the non-mutual beneficial ones remain.)
- mathattack 11y ago
  Let's put externalities (CO2, etc) aside... The only reason that things like canals get built is because people can charge money to recoup their costs. Many infrastructure projects get built and don't earn their capital investment back. (One might argue most) The reason people still build them is a few are enormously profitable. Once "going the long way" gets significantly cheaper, the folks in charge of the canal will lower their price so that equilibrium still means going through them.
  - rosser 11y ago
    No, let's not put externalities aside. That's the whole problem with externalities: putting them aside. However negligible the contribution to global CO₂ concentrations these 100-odd ships over the last couple of quarters have made, they still made it, and it was done to the world I have to live in without consulting anyone or anything but their owner's own bottom line. That's why there needs to be something like a carbon tax (however poorly designed so many of the proposals thus far have been). Because those externalized costs aren't free, and they should be borne by the people who impose them on everyone else. There is absolutely no penalty for pissing in the pool the rest of us happen to be swimming in, and I call bullshit on that. EDIT: And the canal wasn't built so its owners could charge for the privilege of using it. It was built because it took weeks off transit times. Charging for its use is how it was paid for, not why it was built. That is some serious cart-before-the-horse action, right there.
    - gus_massa 11y ago
      Building and maintaining a channel also has a cost in CO2 emission. How many tons of CO2 do saves a ship in fuel using the channel? How many tons of CO2 is the prorated cost of each ship traveling though the channel? I think that the Suez channel has no recent upgrades, but the Panama channel is currently being expanded, and the expansion cost a los of money and a lot of CO2. And there are some projects to build a channel in Nicaragua ...
      - rosser 11y ago
        With a quick search, it looks like container ship emissions are about ~.04kg of CO₂ per ton-mile. Let's ballpark the capacity of a container ship at around 15000 TEU (Twenty-foot Equivalent Unit, or a single 20' container). That seems to be a pretty good median, based on the numbers I'm seeing. It's hard to find reliable numbers for the weight of a TEU, but I'm seeing references to a "maximum gross mass" of 21 and change metric tons, and an empty weight of 2.4 mt. Let's make the math easy and suppose each of the 15k TEUs on a single ship are filled to half capacity, netting a little under 140000 mt. The "long way" is some 3500 extra miles, which, at .04kg/ton-mile, is 1.96 million kg, or 19.6 thousand (metric) tons of CO₂. Per ship. Per trip. And that's just the extra emissions for going the "long way". For sake of comparison, the notional "average" car emits about 4 metric tons of CO₂ per year. I have no idea what the maintenance costs of the canals are in terms of emissions, but they'd have to be amortized across every ship that traverses them. Per another poster, almost 17.5k ships sailed through the Suez Canal in 2015, so you're looking, with very back-of-the-envelope math at a little under 20000 metric tons versus 1/17500th of the annual maintenance emissions for a ~200km long canal. For a single ship's passage through the canal. The construction costs of a canal, on the other hand, have to be amortized across every ship that has ever traversed it. The fractions get ludicrously small there (though they are, admittedly, of a rather larger number). Without knowing the actual emissions numbers for construction or maintenance, I can't be sure, but I'm going to go ahead and predict a clear winner... EDIT: Corrected some bad inputs to my math. Please, someone double-check my calculations. It is, after all, the end of the day on a Friday. My brain may be a smidge soft...
- tacostakohashi 11y ago
  Also putting externalities aside... Really great that economics, innovation and competition have driven down the cost of shipping (larger containerized ships, better fuel efficiency, smaller crews / labor component) and oil extraction down so low that there's now a cheaper option than that imposed by the canal folks. It's not merely an expensive toll that has brought this situation about, it's also cheap shipping.
  - rosser 11y ago
    The major contributing factor to this practice being economically viable is that the big oil producers are trying to undercut one another. That isn't an "advance" in economics, or innovation, or fuel efficiency, or anything else.
    - oatmale 11y ago
      I like how you put the word advance in quotes implying that the poster you're responding to used that word, when in fact they did not.
    - ArkyBeagle 11y ago
      It's a bizarre case where the House of Saud is paring all other factors back to only their lift cost and the rest be damned. It has the flop sweat of desperation to it. The more that happens in That Region, it just makes the people who live there harken back to the Caliphate under the Ottoman Empire only even moreso.
- slyall 11y ago
  Egypt spent around $8 billion on a Suez Canal expansion in 2014 & 2015 in order to double the Canal's capacity. https://en.wikipedia.org/wiki/New_Suez_Canal https://en.wikipedia.org/wiki/New_Suez_Canal
- ArkyBeagle 11y ago
  Prices are sticky some times.
- ryuuchin 11y ago
  Doesn't it also have to do with safety as well? I remember reading that going the long way around also avoids some pirate areas as well (which could also be considered economics, e.g. insurance, etc).
- lumberjack 11y ago
  It's their land and there are a lot of costs associated with maintianing the canal. The failure of economics, that you should look at is in the price of oil. The are polluting the atmosphere and damaging the climate and not reimbursing anyone for the damage they are causing.
  - bedhead 11y ago
    "They"??? No, not they. You. Me. Us. Give me a break with this sanctimonious drivel. Ship owners don't drive around the oceans aimlessly for fun. They are facilitating global trade. The computer you wrote your post on was probably delivered via cargo ship. Ditto half the stuff in your life that you obviously take for granted. So I hate to break this to you, but you are just as responsible for "polluting the atmosphere" and "damaging the climate" as the ship owner, because without you that ship has no need to sail. Please let me know how you plan on reimbursing me. I accept Paypal.
    - goldenkey 11y ago
      Just for kicks, how do you feel about the gigawatts used to mine bitcoins, or rather, keep the blockchain ledger ticking?
    - danharaj 11y ago
      If the person you replied to just died today, virtually nothing would change about global capitalism. Also, what kind of ethics do you subscribe to that validates your reasoning? I can't imagine your definition of responsibility being useful at all except as an excuse to tell people to stop complaining about the flaws of a system far too large to be at all under their influence except collectively. Granted that we have collective responsibility for human activity, then only by collective action can we assume stewardship of our responsibilities. The basis of collective action is first consensus, which is achieved through communication. Therefore the grandparent is taking a perfectly rational action in communicating their distaste for the system. I feel second-hand embarrassment for your combative and flimsy dismissal.
    - mistermann 11y ago
rgbrenner 11y ago
100 ships have taken a route around south africa during the last quarter of 2015. For comparison, 17483 ships used the Suez Canal last year (about 1450/month). And the number of ships increased by 335 in 2015 (compared to 2014). http://www.suezcanal.gov.eg/TRstatHistory.aspx?reportId=2 http://www.suezcanal.gov.eg/TRstatHistory.aspx?reportId=2 Edit: in fact, clicking through the data on that page.. it looks like 2015 was a record year (by tonnage) for the Suez.. along with record toll collections. They did handle more, but smaller, ships in 2008.. but that could just be caused by the trend in the industry toward larger ships. More cargo passed through the Suez than any year previous.
- twelvechairs 11y ago
  Surely it also has to do with there being simply more ships being built which are too big to fit in the suez canal ('Capesize' in shipping parlance)? According to the link below between 2008-2013 the world capesize fleet increased from 817 ships to 1505 ships. https://shippingresearch.wordpress.com/tag/capesize/ https://shippingresearch.wordpress.com/tag/capesize/
- JumpCrisscross 11y ago
  > 100 ships have taken a route around south africa during the last quarter of 2015...17483 ships used the Suez Canal last year Thanks for the context. Any way we could compare the TEUs going each way? Unlikely the 400 ships that went around the Cape are 44 times larger than the 17 483 that went through the Canal (17483 / (4 * 100)), but I'm curious by how much the gap narrows.
vacri 11y ago
Given how offended you are by shipping emissions, I really hope you don't use any products that require shipping - if you're not in China or South East Asia, I hope you avoid the cheap clothing and electronics that are made there, for example. The Suez Canal cuts just one part of those shipping trips if you're in Europe, and if you're in the Americas, there is nothing to shorten the trip between the world's manufacturing hub and the west coast - indeed, you have to travel over an ocean that literally takes up half the globe. So, to use your own argument from above, I hope that you only use locally-sourced equipment, clothing, and food, because I have to live in this world and I doubt you consulted anyone or anything about the shipping requirements for your stuff. I hope you're paying for more expensive locally-produced goods, because if you're getting the cheap imports, you're only caring about your own bottom line.
- rosser 11y ago
  Oh, for fuck's sake. Way to straw-man my position. I'm calling out the waste in taking the long way around Africa just to save a few bucks, not saying "DOWN WITH THE GLOBAL SHIPPING SYSTEM, MAN!"
  - vacri 11y ago
    For fuck's sake indeed - you're so emotive about the issue ("no consulting anyone!!!eleventy!") that you should actually be reminded that you're only talking about one leg of a journey, and shipping still has a fuckton of emissions. And since you're so frothy about "no consultation", then you should be limiting your own usage of goods. My point is that you're turning a molehill into a mountain (11 days x 100 ships in 2 months = evil, 17k ships/mo on normal 2-week routes = yawn), and chucking a huge hissy-fit about it - I am not saying that your capitalised words are your argument (so no straw man there), but instead that you're so emotional about it. So if you are a standard western consumer (and not someone like a hippy in a commune with low consumption), then you're being pretty hypocritical. If you're that emotional about these emissions, then put your money where your mouth is and stop being a consumer - ie: you should be 'DOWN WITH GLOBAL SHIPPING'. And encourage others to not be consumers as well, instead of trying to enact punitive legislation on an industry that's famously difficult to regulate.
jamilaliahmed 11y ago
I don't think so, its a good era now that we have cheap oil available.
- tosseraccount 11y ago
  oil cheap = good houses cheap = bad That's the narrative.
yason 11y ago
In other words, the canal pricing is just about right. As a canal owner you will want some of the ships to take a detour because if all ships used your canal you wouldn't necessarily know if you're actually charging too little. In that case you would start raising prices until some ships, presumably with less urgent cargo, begin to drop out.
- barrkel 11y ago
  Yes; but make no mistake, it's pure rent extraction. The canal has a substantial public value (to the degree that improving the international economy creates public value) but by setting a price that is only just below the cost of avoid the canal, almost all of the potential public value is captured by the people who control the canal. There's some resdiual value accruing to the public from getting goods faster, but urgent goods aren't generally sent by sea.
  - dalke 11y ago
    > it's pure rent extraction And this is bad because ... ? Is there a more reasonable alternative for how to set the fee? Would that shift in value, which currently goes to Egypt, instead go to the public? And if so, how? Or will it go to the owners of the shipping companies? Perhaps there should be some sort of Suez Canal authority, which follows a neutrality convention in regards to the national origin and type of shipping? In that way, it wouldn't have some of the crises which might occur with pure rent extraction. For example, a country might invade if its ships aren't allowed through, or face exorbitant fees compared to other countries.
    - barrkel 11y ago
      Capitalism is useful way to organize certain social activity because it uses prices to coordinate production and consumption, and uses profit to encourage competition. Competition reduces profits, and the surplus goes to the consumer. Capitalism isn't a naturally right or better thing in and of itself; its end effects are what matter. It has bad sides too; for example, it's easy to fund immoral practices when the only input you need to make is decide whether to purchase something or not. It's easy to make a purchase decision, and not worry about the effect that has on prices and incentives further down the line, that your purchase may be inflicting misery on other people. So, capitalism: good sides and bad sides. Overall though, it's mostly good. But break some of the underlying assumptions, and the good sides may not be enough to outweigh the bad sides. Apply this to the situation at hand. How does one compete with a canal like the Suez? Without some major technology innovation, it's either build another canal or go the long way around. The profit isn't actually encouraging much competition here, and probably won't for a few more decades, until we have ships powered by other forms of energy, probably. So we (the consumer) are not getting the benefit of a capitalistic approach to this problem. So market effects are probably not the right way to price this thing - they're not economically or socially efficient. This kind of rent extraction isn't good for countries like Egypt either. Like oil, getting a big dose of rent without needing much input means the money goes in at the top, and only a little bit trickles down. It's a great situation for a corrupt government. It can fund authoritarianism, cronyism, and keep a population underfoot for decades to come. Like Egypt, I guess.
eternalban 11y ago
Costs less than bottled water. Fuels empires' navies and industry. "It is market driven". (discuss)
jssmith 11y ago
There is a lot more substantive detail in one of the linked articles: http://gcaptain.com/canals-feel-ripples-of-container-shipping-crisis-as-vessels-go-the-long-way-round/ http://gcaptain.com/canals-feel-ripples-of-container-shippin... - Ships are going the long way on "back haul", from Europe to Asia, not the other way around. - Overcapacity is a significant problem for the shipping industry (see, http://www.bloomberg.com/quote/BDIY:IND http://www.bloomberg.com/quote/BDIY:IND over the last year to get a sense). This is a critical factor in making round-about trips economically desirable. - Techniques such as "slow steaming" or "super slow-steaming" keep fuel costs in check.
- deleted 11y ago
  [deleted]
- iofj 11y ago
  Because the world economy is currently overproducing (more supply than demand) to prevent prices from falling, these ships (esp. oil tankers) are being "transformed" into storage. Either by taking a longer path, or by outright idling them in front of harbours. Since nobody wants to pare back production (because the last one to reduce production will retain marketshare and revenue and jobs and ...) this is providing a short intermission where prices don't have to drop. This extra capacity that slower shipping provides is filling up fast, it will be full in less than 2-4 months (measured starting in december), and the next leg down for the global economy will begin.
GreaterFool 11y ago
That can't be good for the environment. I recall reading that those big ships pollute like crazy. After all when you're on international waters (1) who cares and (2) who's going to do anything about it?
xenadu02 11y ago
Pro tip: cheap oil won't last forever. There will be future crashes in prices but the long-term trend is up.

140 points by altstar 11y ago

Really sad that economics makes a bunch of massive ships travel thousands of miles out of their way, burning tons of extra fuel, just because a bunch of guys charge way too much to drive through a canal that was built a long time ago.

dmm 11y ago
Markets provide price discovery and efficient[0] prices are very valuable. In that sense it's not a waste. Is this even a significant phenomenon? The article mentions 100 ships going the long way but wikipedia says the Suez averages 46 ships per day, or more than 16,500 per year. [0] The definition of efficient in economics is roughly "It's not possible to make anyone better off without making someone else worse off".
- Amorymeltzer 11y ago
  >Over 100 ships did this between late October 2015 and the end of the year. That's somewhere between 1 and 1.5 ships a day, which is between 2-3% of daily entrance figures. That's certainly not nothing.
  - esmi 11y ago
    But it's also not "taking shipping routes back to the 1800s".
- pcarolan 11y ago
  I think he means waste as in unaccounted externalities such as putting co2 into the atmosphere without paying the social costs.
- davidw 11y ago
  > The definition of efficient in economics is roughly "It's not possible to make anyone better off without making someone else worse off" That's a terrible definition, because a lot of the economy is not a zero sum game, and it's hard enough as it is to break people out of that kind of thinking.
  - deleted 11y ago
    [deleted]
  - gozur88 11y ago
    Beyond the macroeconomics, two people will not agree on a price unless in doing so they'll both be better off in some way.
  - eru 11y ago
    Oh, dmm is just defining pareto efficiency. Said in a more positive light: `a situation is pareto efficient if all mutually beneficial transactions have been done.' (And thus in dmm's words, only the non-mutual beneficial ones remain.)
mathattack 11y ago
Let's put externalities (CO2, etc) aside... The only reason that things like canals get built is because people can charge money to recoup their costs. Many infrastructure projects get built and don't earn their capital investment back. (One might argue most) The reason people still build them is a few are enormously profitable. Once "going the long way" gets significantly cheaper, the folks in charge of the canal will lower their price so that equilibrium still means going through them.
- rosser 11y ago
  No, let's not put externalities aside. That's the whole problem with externalities: putting them aside. However negligible the contribution to global CO₂ concentrations these 100-odd ships over the last couple of quarters have made, they still made it, and it was done to the world I have to live in without consulting anyone or anything but their owner's own bottom line. That's why there needs to be something like a carbon tax (however poorly designed so many of the proposals thus far have been). Because those externalized costs aren't free, and they should be borne by the people who impose them on everyone else. There is absolutely no penalty for pissing in the pool the rest of us happen to be swimming in, and I call bullshit on that. EDIT: And the canal wasn't built so its owners could charge for the privilege of using it. It was built because it took weeks off transit times. Charging for its use is how it was paid for, not why it was built. That is some serious cart-before-the-horse action, right there.
  - gus_massa 11y ago
    Building and maintaining a channel also has a cost in CO2 emission. How many tons of CO2 do saves a ship in fuel using the channel? How many tons of CO2 is the prorated cost of each ship traveling though the channel? I think that the Suez channel has no recent upgrades, but the Panama channel is currently being expanded, and the expansion cost a los of money and a lot of CO2. And there are some projects to build a channel in Nicaragua ...
    - rosser 11y ago
      With a quick search, it looks like container ship emissions are about ~.04kg of CO₂ per ton-mile. Let's ballpark the capacity of a container ship at around 15000 TEU (Twenty-foot Equivalent Unit, or a single 20' container). That seems to be a pretty good median, based on the numbers I'm seeing. It's hard to find reliable numbers for the weight of a TEU, but I'm seeing references to a "maximum gross mass" of 21 and change metric tons, and an empty weight of 2.4 mt. Let's make the math easy and suppose each of the 15k TEUs on a single ship are filled to half capacity, netting a little under 140000 mt. The "long way" is some 3500 extra miles, which, at .04kg/ton-mile, is 1.96 million kg, or 19.6 thousand (metric) tons of CO₂. Per ship. Per trip. And that's just the extra emissions for going the "long way". For sake of comparison, the notional "average" car emits about 4 metric tons of CO₂ per year. I have no idea what the maintenance costs of the canals are in terms of emissions, but they'd have to be amortized across every ship that traverses them. Per another poster, almost 17.5k ships sailed through the Suez Canal in 2015, so you're looking, with very back-of-the-envelope math at a little under 20000 metric tons versus 1/17500th of the annual maintenance emissions for a ~200km long canal. For a single ship's passage through the canal. The construction costs of a canal, on the other hand, have to be amortized across every ship that has ever traversed it. The fractions get ludicrously small there (though they are, admittedly, of a rather larger number). Without knowing the actual emissions numbers for construction or maintenance, I can't be sure, but I'm going to go ahead and predict a clear winner... EDIT: Corrected some bad inputs to my math. Please, someone double-check my calculations. It is, after all, the end of the day on a Friday. My brain may be a smidge soft...
tacostakohashi 11y ago
Also putting externalities aside... Really great that economics, innovation and competition have driven down the cost of shipping (larger containerized ships, better fuel efficiency, smaller crews / labor component) and oil extraction down so low that there's now a cheaper option than that imposed by the canal folks. It's not merely an expensive toll that has brought this situation about, it's also cheap shipping.
- rosser 11y ago
  The major contributing factor to this practice being economically viable is that the big oil producers are trying to undercut one another. That isn't an "advance" in economics, or innovation, or fuel efficiency, or anything else.
  - oatmale 11y ago
    I like how you put the word advance in quotes implying that the poster you're responding to used that word, when in fact they did not.
  - ArkyBeagle 11y ago
    It's a bizarre case where the House of Saud is paring all other factors back to only their lift cost and the rest be damned. It has the flop sweat of desperation to it. The more that happens in That Region, it just makes the people who live there harken back to the Caliphate under the Ottoman Empire only even moreso.
slyall 11y ago
Egypt spent around $8 billion on a Suez Canal expansion in 2014 & 2015 in order to double the Canal's capacity. https://en.wikipedia.org/wiki/New_Suez_Canal https://en.wikipedia.org/wiki/New_Suez_Canal
ArkyBeagle 11y ago
Prices are sticky some times.
ryuuchin 11y ago
Doesn't it also have to do with safety as well? I remember reading that going the long way around also avoids some pirate areas as well (which could also be considered economics, e.g. insurance, etc).
lumberjack 11y ago
It's their land and there are a lot of costs associated with maintianing the canal. The failure of economics, that you should look at is in the price of oil. The are polluting the atmosphere and damaging the climate and not reimbursing anyone for the damage they are causing.
- bedhead 11y ago
  "They"??? No, not they. You. Me. Us. Give me a break with this sanctimonious drivel. Ship owners don't drive around the oceans aimlessly for fun. They are facilitating global trade. The computer you wrote your post on was probably delivered via cargo ship. Ditto half the stuff in your life that you obviously take for granted. So I hate to break this to you, but you are just as responsible for "polluting the atmosphere" and "damaging the climate" as the ship owner, because without you that ship has no need to sail. Please let me know how you plan on reimbursing me. I accept Paypal.
  - goldenkey 11y ago
    Just for kicks, how do you feel about the gigawatts used to mine bitcoins, or rather, keep the blockchain ledger ticking?
  - danharaj 11y ago
    If the person you replied to just died today, virtually nothing would change about global capitalism. Also, what kind of ethics do you subscribe to that validates your reasoning? I can't imagine your definition of responsibility being useful at all except as an excuse to tell people to stop complaining about the flaws of a system far too large to be at all under their influence except collectively. Granted that we have collective responsibility for human activity, then only by collective action can we assume stewardship of our responsibilities. The basis of collective action is first consensus, which is achieved through communication. Therefore the grandparent is taking a perfectly rational action in communicating their distaste for the system. I feel second-hand embarrassment for your combative and flimsy dismissal.
  - mistermann 11y ago

rgbrenner 11y ago

100 ships have taken a route around south africa during the last quarter of 2015. For comparison, 17483 ships used the Suez Canal last year (about 1450/month). And the number of ships increased by 335 in 2015 (compared to 2014). http://www.suezcanal.gov.eg/TRstatHistory.aspx?reportId=2 http://www.suezcanal.gov.eg/TRstatHistory.aspx?reportId=2 Edit: in fact, clicking through the data on that page.. it looks like 2015 was a record year (by tonnage) for the Suez.. along with record toll collections. They did handle more, but smaller, ships in 2008.. but that could just be caused by the trend in the industry toward larger ships. More cargo passed through the Suez than any year previous.

twelvechairs 11y ago
Surely it also has to do with there being simply more ships being built which are too big to fit in the suez canal ('Capesize' in shipping parlance)? According to the link below between 2008-2013 the world capesize fleet increased from 817 ships to 1505 ships. https://shippingresearch.wordpress.com/tag/capesize/ https://shippingresearch.wordpress.com/tag/capesize/
JumpCrisscross 11y ago
> 100 ships have taken a route around south africa during the last quarter of 2015...17483 ships used the Suez Canal last year Thanks for the context. Any way we could compare the TEUs going each way? Unlikely the 400 ships that went around the Cape are 44 times larger than the 17 483 that went through the Canal (17483 / (4 * 100)), but I'm curious by how much the gap narrows.

vacri 11y ago

Given how offended you are by shipping emissions, I really hope you don't use any products that require shipping - if you're not in China or South East Asia, I hope you avoid the cheap clothing and electronics that are made there, for example. The Suez Canal cuts just one part of those shipping trips if you're in Europe, and if you're in the Americas, there is nothing to shorten the trip between the world's manufacturing hub and the west coast - indeed, you have to travel over an ocean that literally takes up half the globe. So, to use your own argument from above, I hope that you only use locally-sourced equipment, clothing, and food, because I have to live in this world and I doubt you consulted anyone or anything about the shipping requirements for your stuff. I hope you're paying for more expensive locally-produced goods, because if you're getting the cheap imports, you're only caring about your own bottom line.

rosser 11y ago
Oh, for fuck's sake. Way to straw-man my position. I'm calling out the waste in taking the long way around Africa just to save a few bucks, not saying "DOWN WITH THE GLOBAL SHIPPING SYSTEM, MAN!"
- vacri 11y ago
  For fuck's sake indeed - you're so emotive about the issue ("no consulting anyone!!!eleventy!") that you should actually be reminded that you're only talking about one leg of a journey, and shipping still has a fuckton of emissions. And since you're so frothy about "no consultation", then you should be limiting your own usage of goods. My point is that you're turning a molehill into a mountain (11 days x 100 ships in 2 months = evil, 17k ships/mo on normal 2-week routes = yawn), and chucking a huge hissy-fit about it - I am not saying that your capitalised words are your argument (so no straw man there), but instead that you're so emotional about it. So if you are a standard western consumer (and not someone like a hippy in a commune with low consumption), then you're being pretty hypocritical. If you're that emotional about these emissions, then put your money where your mouth is and stop being a consumer - ie: you should be 'DOWN WITH GLOBAL SHIPPING'. And encourage others to not be consumers as well, instead of trying to enact punitive legislation on an industry that's famously difficult to regulate.

jamilaliahmed 11y ago

I don't think so, its a good era now that we have cheap oil available.

tosseraccount 11y ago
oil cheap = good houses cheap = bad That's the narrative.

yason 11y ago

In other words, the canal pricing is just about right. As a canal owner you will want some of the ships to take a detour because if all ships used your canal you wouldn't necessarily know if you're actually charging too little. In that case you would start raising prices until some ships, presumably with less urgent cargo, begin to drop out.

barrkel 11y ago
Yes; but make no mistake, it's pure rent extraction. The canal has a substantial public value (to the degree that improving the international economy creates public value) but by setting a price that is only just below the cost of avoid the canal, almost all of the potential public value is captured by the people who control the canal. There's some resdiual value accruing to the public from getting goods faster, but urgent goods aren't generally sent by sea.
- dalke 11y ago
  > it's pure rent extraction And this is bad because ... ? Is there a more reasonable alternative for how to set the fee? Would that shift in value, which currently goes to Egypt, instead go to the public? And if so, how? Or will it go to the owners of the shipping companies? Perhaps there should be some sort of Suez Canal authority, which follows a neutrality convention in regards to the national origin and type of shipping? In that way, it wouldn't have some of the crises which might occur with pure rent extraction. For example, a country might invade if its ships aren't allowed through, or face exorbitant fees compared to other countries.
  - barrkel 11y ago
    Capitalism is useful way to organize certain social activity because it uses prices to coordinate production and consumption, and uses profit to encourage competition. Competition reduces profits, and the surplus goes to the consumer. Capitalism isn't a naturally right or better thing in and of itself; its end effects are what matter. It has bad sides too; for example, it's easy to fund immoral practices when the only input you need to make is decide whether to purchase something or not. It's easy to make a purchase decision, and not worry about the effect that has on prices and incentives further down the line, that your purchase may be inflicting misery on other people. So, capitalism: good sides and bad sides. Overall though, it's mostly good. But break some of the underlying assumptions, and the good sides may not be enough to outweigh the bad sides. Apply this to the situation at hand. How does one compete with a canal like the Suez? Without some major technology innovation, it's either build another canal or go the long way around. The profit isn't actually encouraging much competition here, and probably won't for a few more decades, until we have ships powered by other forms of energy, probably. So we (the consumer) are not getting the benefit of a capitalistic approach to this problem. So market effects are probably not the right way to price this thing - they're not economically or socially efficient. This kind of rent extraction isn't good for countries like Egypt either. Like oil, getting a big dose of rent without needing much input means the money goes in at the top, and only a little bit trickles down. It's a great situation for a corrupt government. It can fund authoritarianism, cronyism, and keep a population underfoot for decades to come. Like Egypt, I guess.

eternalban 11y ago

Costs less than bottled water. Fuels empires' navies and industry. "It is market driven". (discuss)

jssmith 11y ago

There is a lot more substantive detail in one of the linked articles: http://gcaptain.com/canals-feel-ripples-of-container-shipping-crisis-as-vessels-go-the-long-way-round/ http://gcaptain.com/canals-feel-ripples-of-container-shippin... - Ships are going the long way on "back haul", from Europe to Asia, not the other way around. - Overcapacity is a significant problem for the shipping industry (see, http://www.bloomberg.com/quote/BDIY:IND http://www.bloomberg.com/quote/BDIY:IND over the last year to get a sense). This is a critical factor in making round-about trips economically desirable. - Techniques such as "slow steaming" or "super slow-steaming" keep fuel costs in check.

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iofj 11y ago
Because the world economy is currently overproducing (more supply than demand) to prevent prices from falling, these ships (esp. oil tankers) are being "transformed" into storage. Either by taking a longer path, or by outright idling them in front of harbours. Since nobody wants to pare back production (because the last one to reduce production will retain marketshare and revenue and jobs and ...) this is providing a short intermission where prices don't have to drop. This extra capacity that slower shipping provides is filling up fast, it will be full in less than 2-4 months (measured starting in december), and the next leg down for the global economy will begin.

GreaterFool 11y ago

That can't be good for the environment. I recall reading that those big ships pollute like crazy. After all when you're on international waters (1) who cares and (2) who's going to do anything about it?

xenadu02 11y ago

Pro tip: cheap oil won't last forever. There will be future crashes in prices but the long-term trend is up.