6 ms·

I may be misremembering, but from how I understood container shipping works, that is always the case with lost / damaged containers, no matter the size of the e

by relix 6y ago

I may be misremembering, but from how I understood container shipping works, that is always the case with lost / damaged containers, no matter the size of the event. If only one container falls off the boat, all entities who were shipping things on that boat are required to chip in proportionally to the amount of containers they were shipping, to make the owner of that container whole. The idea being that otherwise it's not fair to the owners of the top level containers, which have a higher chance of falling off than the bottom level containers. Everyone's share of the boat is equal. For this reason you always want to take the insurance that is offered against this, just in case that one container contained something worth a few million, and suddenly you're on the hook to pay an amount that is a multiple of what you were shipping in the first place.

asdfaoeu 6y ago
From some rudimenatary googling it's based on the value of the goods. So unless your cargo is expensive you wouldn't pay nearly as much. Unless there were expenditures there's no way you would be out more than its worth. Also because if this they'd likely load extremely valuable cargo in positions were it's not likely to be lost or jettisoned.
- hef19898 6y ago
  Shows quite nice how important it is to really understand your Incoterms. And to procure insurance to cover any risk left open.
  - eru 6y ago
    > And to procure insurance to cover any risk left open. Or alternatively, to be aware of which risks you are still bearing. Not all risks have to be insured.
    - hef19898 6y ago
      True. But than full, or almost full, transport insurance is cheap enough even for small businesses.
dmurray 6y ago
> The idea being that otherwise it's not fair to the owners of the top level containers, which have a higher chance of falling off than the bottom level containers. Everyone's share of the boat is equal. In general, being able to charge different prices to different customers is very beneficial to the seller. So should we expect this to change as ship operators figure out more sophisticated pricing models?
- mbreese 6y ago
  I always thought part of the advantage that shipping containers brought was that they were more or less interchangeable. And that meant that they could be loaded in whatever manner best suited the whole ship. The details of which might not be known at the time when the container was booked. The carrier might be able to reserve “interior” or “top level” spaces for a different prices, but with shipments being loaded/offloaded at different ports, the logistics of loading can be quite complicated. If your container need to be offloaded at the first of three ports, you probably couldn’t have the option of an interior space. Or if you had an extremely heavy container, that should be loaded in the lower part of the ship for safety. My guess is that the orchestration of how containers are loaded is complex enough that the order of stacking is best left up to the shipper and adding cost/location optimization to the equation might make things too complicated. The containers should be loaded in the manner that is the safest and most efficient for unloading.
  - Raidion 6y ago
    I'm sure it's just a level of optimization that's hard to solve because of a few reasons. a) it's a fairly hard technology problem. Large container ships can carry 20k containers. If each of those has a spot, and you have to optimize, the search space is suddenly looking like 20,000!, which is just a wildly big number. So assuming you have some sort of technological solution and know where every container should go, b) you need to move all the logistics around so that containers arrive in the correct order to get loaded in the correct spots. You need to do all this just to massively increase the complexity of your billing model to offer slightly different rates of insurance. I'm sure there are teams looking at ways to make this better (just stipulate in the contract that any super valuable containers arrive early so they're loaded lower), but this is a HARD problem to solve completely.
LeifCarrotson 6y ago
I wonder when it becomes more economical to load top level containers with cheap goods and keep the multi-million-dollar containers somewhere safer. You'd need some significant automation and integration with all the port-side trucks, forklifts, and cranes that unload and load your ship to make sure that containers arrive and depart in the right order. You could then offer customers lower insurance premiums (or let them pay more for interior space) because average loss would be reduced. But that would take a huge amount of vertical integration or an industry-wide cooperation effort and cost sensitivity that I don't think is present.
- lolc 6y ago
  Loading is already very complex and takes special knowledge and more and more software to balance the ship and keep the loading-process efficient. Dangerous goods are separated from the quarters as much as possible for example. I'm sure the process already includes variables like value. But I also assume that overall, unless we talk about unique items like artwork, not enough containers are lost to put much weight on the value of the contents compared to everything else.
slowhand09 6y ago
Wow, this is sobering information. I shipped a car from the UK to the US several years ago. I purchased shipping insurance on the container and car. And watched nervously from afar as I tracked it online when possible. I had no idea there was any possibility I could have any liability for others losses. If I understand this correctly...

by relix 6y ago

asdfaoeu 6y ago

From some rudimenatary googling it's based on the value of the goods. So unless your cargo is expensive you wouldn't pay nearly as much. Unless there were expenditures there's no way you would be out more than its worth. Also because if this they'd likely load extremely valuable cargo in positions were it's not likely to be lost or jettisoned.

hef19898 6y ago
Shows quite nice how important it is to really understand your Incoterms. And to procure insurance to cover any risk left open.
- eru 6y ago
  > And to procure insurance to cover any risk left open. Or alternatively, to be aware of which risks you are still bearing. Not all risks have to be insured.
  - hef19898 6y ago
    True. But than full, or almost full, transport insurance is cheap enough even for small businesses.

dmurray 6y ago

> The idea being that otherwise it's not fair to the owners of the top level containers, which have a higher chance of falling off than the bottom level containers. Everyone's share of the boat is equal. In general, being able to charge different prices to different customers is very beneficial to the seller. So should we expect this to change as ship operators figure out more sophisticated pricing models?

mbreese 6y ago
I always thought part of the advantage that shipping containers brought was that they were more or less interchangeable. And that meant that they could be loaded in whatever manner best suited the whole ship. The details of which might not be known at the time when the container was booked. The carrier might be able to reserve “interior” or “top level” spaces for a different prices, but with shipments being loaded/offloaded at different ports, the logistics of loading can be quite complicated. If your container need to be offloaded at the first of three ports, you probably couldn’t have the option of an interior space. Or if you had an extremely heavy container, that should be loaded in the lower part of the ship for safety. My guess is that the orchestration of how containers are loaded is complex enough that the order of stacking is best left up to the shipper and adding cost/location optimization to the equation might make things too complicated. The containers should be loaded in the manner that is the safest and most efficient for unloading.
- Raidion 6y ago
  I'm sure it's just a level of optimization that's hard to solve because of a few reasons. a) it's a fairly hard technology problem. Large container ships can carry 20k containers. If each of those has a spot, and you have to optimize, the search space is suddenly looking like 20,000!, which is just a wildly big number. So assuming you have some sort of technological solution and know where every container should go, b) you need to move all the logistics around so that containers arrive in the correct order to get loaded in the correct spots. You need to do all this just to massively increase the complexity of your billing model to offer slightly different rates of insurance. I'm sure there are teams looking at ways to make this better (just stipulate in the contract that any super valuable containers arrive early so they're loaded lower), but this is a HARD problem to solve completely.

LeifCarrotson 6y ago

I wonder when it becomes more economical to load top level containers with cheap goods and keep the multi-million-dollar containers somewhere safer. You'd need some significant automation and integration with all the port-side trucks, forklifts, and cranes that unload and load your ship to make sure that containers arrive and depart in the right order. You could then offer customers lower insurance premiums (or let them pay more for interior space) because average loss would be reduced. But that would take a huge amount of vertical integration or an industry-wide cooperation effort and cost sensitivity that I don't think is present.

lolc 6y ago
Loading is already very complex and takes special knowledge and more and more software to balance the ship and keep the loading-process efficient. Dangerous goods are separated from the quarters as much as possible for example. I'm sure the process already includes variables like value. But I also assume that overall, unless we talk about unique items like artwork, not enough containers are lost to put much weight on the value of the contents compared to everything else.

slowhand09 6y ago

Wow, this is sobering information. I shipped a car from the UK to the US several years ago. I purchased shipping insurance on the container and car. And watched nervously from afar as I tracked it online when possible. I had no idea there was any possibility I could have any liability for others losses. If I understand this correctly...