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Ship scrapping accelerates ahead of Panama Canal launch
- tomc1985 10y agoInteresting. Though it seems odd to scrap them when there are still two perfectly-workable shipping lanes that they'll fit through
- CapitalistCartr 10y agoThe operating cost per TEU is inversely proportional to ship size. New container ships are 17, 18, 19 thousand TEU behemoths. Even the New Panamax ships are 13,000 TEU.
- JacobAldridge 10y agoThanks for adding that detail - the size of the New Panamax ships was one piece of information missing from the article that would have helped with perspective.
- pchristensen 10y agoIn the article, it said that the market price for shipping capacity has dropped by 60+% in the last 2 yrs, dropping below the operating cost for the ships. Also, not all the ships are being scrapped, but there will be lower demand for Panamax sized ships once New Panamax capacity comes online.
- hristov 10y agoI don't think the issue is availability of shipping lanes. I think the issue is that they will be no longer economical to operate those ships when the new panama canal will allow ships that have twice the useful load to go through.
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- sounds 10y agoThere have been some articles suggesting that shipping contracts (especially futures) are an economic indicator that still leads the market. Scrapping your capacity could be taken as an indicator as well.
- dnautics 10y agoI agree in general but this is occurring to generate resources for bigger ships, so not knowing the numbers, there is a possibility the net capacity may be balanced or even grow. Panamax is an "artificially constrained" size class
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- Shivetya 10y agoGoing to have to say this is likely more do to consolidation in the industry. the top 10 shipping companies control two thirds of the capacity so when others join forces allowing them to share capacity they no longer need their own ships or simply need less. Removing these ships saves money on crews, taxes, maintenance, and more. Throw in sharing capacity with other similar minded players and removing this excess capacity could raise rates. Of course the downside is less independent players mean shipping prices could rise for non competitive ports
- kcorbitt 10y ago> For example, rates for a 4,400 teu gearless panamax ship of $5,400 per day, are a staggering 63% below the market rates of a year ago, and in many cases are below the daily operating cost. TIL you can rent a Panamax cargo ship for $5,400 a day! That's definitely cheaper than I would have expected. Someone should park one of those in the San Francisco bay and convert it into apartments.
- mapt 10y agoYou act as if land scarcity was the issue in San Francisco, rather than legal permission to establish an abode. If people started doing this, the city would find a way to ban them from doing this.
- Florin_Andrei 10y agoRegardless - there is some land scarcity in SF, objectively speaking. It's bound to have some non-zero contribution to housing shortages. This is a city surrounded by water on 3 sides. It's not like some iconic-looking locality in Texas, home of the Marlboro Man, where "the land stretches out forever".
- mikeash 10y agoThat's why people want to park the ship far enough out that it's in international waters: https://blueseed.com https://blueseed.com
- syngrog66 10y agothen no country's navy would protect you. except for the US Navy. which acts as the planet's navy. therefore all US taxpayers will be paying for it, in effect. wait a minute... doh. maybe that is an efficient hack!
- foota 10y agoYes, because 12 miles off the coast of San Francisco is such a sketchy place.
- tropo 10y agoThe shipbreaking process is pretty strange. It's really labor-intensive. It looks dangerous. It looks like large chunks could even get lost in the beach. Does the company even legitimately own the beach? Of course, due to labor cost and environmental law and so many other things, we can't replicate that method in a first-world nation. I wonder if we could automate it. I think the ships are mostly just going to be melted down. That should be easy: put a dry dock next to a really big furnace that can consume the whole ship in one go. NOM NOM NOM!
- ams6110 10y agoI don't understand how they get them on the beach. I'd think they'd bottom out well offshore, even at high tide.
- rwhitman 10y agoI recently got sucked up watching videos of this on YouTube. From what I can tell they just run them at top speed directly onto the beach: https://www.youtube.com/watch?v=5kDbwE7mFck https://www.youtube.com/watch?v=5kDbwE7mFck
- andyjdavis 10y agoIt initially seems like it would be difficult to so comprehensively beach a ship but that impression may be in part due to the fact that normally the ship's crew would be trying to avoid being beached. In other situations when a ship is beached we are seeing a ship that did everything it could to avoid or at least minimize the situation. Not that surprising really that the outcome is very different if the crew point the ship directly at the beach, try to arrive with as much momentum as possible and keep the engines at full power throughout while ignoring the various bumps and thumps.
- wiml 10y agoIn addition, I assume, the ships being beached are empty- no cargo, very little fuel, probably stripped of a lot of normal equipment. They'll have a much shallower draft than a laden ship.
- emailgregn 10y agoAre the newer ships more environmentally friendly? I'd assume only slightly because they're still burning bunker oil, only slightly more efficiently. Which I find perverse given the attention focused on car pollution.
- lmm 10y agoMuch more, yes - modern ships have been built slower, with lover rev-engines, to save fuel. And a larger ship is inherently more environmentally friendly. And even the oldest ships do far, far less environmental damage per kilogram per kilometer than cars or other road transport. Not to mention that the issues with nitrogen oxide emissions in particular (the focus of the recent scandal) are less about environmental damage and more about the danger to humans from breathing them in, which is obviously a lot more important when emissions are happening in the middle of a city rather than out on the open sea.
- mikiem 10y agoTo understand this article (swiped from Wikipedia): TEU: Twenty Foot Equivalent Unit is the unit of the capacity of a container ship, a container terminal and the statistics of the container transit in a port. The two most common international standardised containers are those of twenty and forty foot. LDT: Light displacement ton, the weight of a ship without anything on board, used to determine the value of a ship which is to be scrapped
- touristtam 10y agoI wonder how much effort it would take to require operator of those sea monsters to get them dismantled in dry docks.
- bogomipz 10y agoCan someone explain the correlation between the new Panama Canal coming online and the need to scrap ships? For an eye opener into the horrid industry of ship scapping google "Chitagong Ship Breaking." Basically they hall them into a ship yard in Bangladesh and pay people peanuts to risk their lives dismantling this tonnage by hand. People die all the time. Its a disaster in many different ways. It's everything that's bad about globalization.
- thebakeshow 10y agoThe Panama Canal re-opening will allow larger ships to pass through. The larger ships are much more cost effective, and now that they will be able to traverse the canal, the small-ish ships are being decommissioned.