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California’s container-ship traffic jam
- guyzero 6y agoa) the comments on this are unhinged b) why can't the ships go to Oakland or Seattle? There's probably a reason, but it seems like an obvious alternative.
- sxates 6y agoGiven the dozens of ships anchored in the bay, I'm not sure Oakland has spare capacity either.
- wahern 6y agoWell, 1 dozen, at least: https://www.marinetraffic.com/en/ais/home/centerx:-122.4/centery:37.7/zoom:11 https://www.marinetraffic.com/en/ais/home/centerx:-122.4/cen... (Only counting the green dots, which represent cargo vessels.)
- sxates 6y agoThanks for sharing this link, I had been looking for something like this!
- mike_d 6y agoOakland, Seattle, and Tacoma (the only other west coast options) are tiny by comparison. LA/Long Beach handles 25% of all imports to the US. Based on some quick research it looks like some shippers are even routing containers from Asia as far away as Houston.
- secondstring 6y agoI couldn't tell whether you meant on HN or on the article, so I went back to see if the article had a comment section. ... I wish I hadn't
- guyzero 6y agoI meant the article comments as you discovered.
- teebs 6y agoAs others say, it's about the size of the port. But it's not only that those ports can't handle more ships - it's also that many of the ships in operation are so big they can't fit in smaller ports. I know that Oakland, for example, is always going to be second tier because it's just not possible to send the largest container ships into the San Francisco Bay without rebuilding a lot of the port to handle much bigger ships - dredging, larger cranes, larger docks. This phenomenon is because larger ships are more efficient, and ocean shipping is a super competitive, low-margin business (during normal times) like the airline industry, so in order to eek out a tiny profit, ocean lines consolidate and build bigger and bigger ships, which further drops prices. These ships can only actually go to a handful of megaports around the world, though. Another factor is the infrastructure that exists at the ports - you need to do something with the cargo once it gets on shore. LA/Long Beach has invested in big, efficient terminals for trucks and trains to get loaded quickly and move cargo out of the port in big volumes. Source: I used to work at Flexport on ocean shipping, so I have a general understanding of the industry
- CameronNemo 6y agoWhy can't larger ships be unloaded onto smaller ships at sea? Then those smaller ships would have access to a wider net of ports. Like a river flooding out across a delta before it reaches the ocean, but in reverse.
- zaroth 6y agoThat would require building the infrastructure in the form similar to a oil rig out there to facilitate the transfer. This infrastructure would only be valuable or even necessary for perhaps 2-3 months every 5 years. Who would ever finance that?
- walrus01 6y agoonly the very tiniest of container ships have their own cranes onboard, anything above the tiniest size is entirely dependent on shore handling cranes. also moving cargo between two ships floating around at sea is dangerous and difficult, giant ships are not meant to hold position parallel to each other in the open ocean (or indeed closely parallel to anything) without the assist of many tugs. a "geared" (with crane) container ship looks like this, and even so it would be a very risky move to use the crane to do anything other than load a container to/from a wharf while the ship was firmly moored to it. https://www.google.com/search?q=geared+container+ship&client=firefox-b-d&sxsrf=ALeKk00tG1Js_ztCLFMGD95T72oWIz7dlQ:1611208223479&source=lnms&tbm=isch&sa=X&ved=2ahUKEwi1-MauqqzuAhXQKDQIHf5fDrUQ_AUoAXoECBYQAw&biw=1680&bih=953&dpr=2 https://www.google.com/search?q=geared+container+ship&client...
- elihu 6y ago> “Terminals are working with limited labor and split shifts,” it said, asserting that this is related to COVID. “This labor shortage affects all terminals’ TAT [turnaround time] for truckers, inter-terminal transfers and the number of daily appointments available for gate transactions and delays our vessel operations.” Sounds like this isn't going to improve until we can vaccinate more people, especially essential workers (and I would include these dock workers in that).
- connorproctor 6y agoThe article states a huge spike in imports are causing a traffic jam worse than when the port of LA workers went on strike a few years ago. I went searching for the "why" behind imports spiking and came across this: >U.S. consumers dramatically increase spending on goods as their ability to spend on services was constrained [by COVID] and that their lost income from unemployment would be counterbalanced by stimulus. https://www.freightwaves.com/news/data-reveals-unprecedented-nature-of-us-import-surge https://www.freightwaves.com/news/data-reveals-unprecedented...
- oceanplexian 6y agoI wonder how many Americans will be spending their stimulus on a new television or a new phone, and how many will be using it for housing and food. Seems like the former, which is great news for the Chinese economy.
- lambda_obrien 6y agoFor most people, the stimulus is just a bonus. Even if 30 percent of people lost jobs, they're the minority. I think the money would have been better used as a weekly stipend for those on unemployment, or those who lost income at least. I certainly don't need the 1800 bucks I got for my family of 3 on new year's, for me it's just money in the bank. I wish it could have gone to someone more needing, so maybe I'll donate it, but it shouldn't have even gone to me, is what I'm saying.
- CaliforniaKarl 6y ago> maybe I'll donate it Did you end up doing so?
- ahepp 6y agoSince repayment will be a burden borne by the fortunate through taxation and inflation, isn't "checks for everyone" in a sense equivalent to "checks for the needy"? Except we all save the trouble of means testing, or the sting of missing out on a windfall.
- Reedx 6y agoHere's how much the cost to ship a container has changed over time: https://twitter.com/typesfast/status/1351626763189714945 https://twitter.com/typesfast/status/1351626763189714945
- azurezyq 6y agoI read the comments for the tweet but still cannot understand why... Could you please explain a bit?
- Scoundreller 6y agoMy guess is that there was no slack sea cargo capacity between Shanghai and LA, so once air cargo disappeared, more cargo went by sea. Rotterdam-Shanghai, I have no idea, timeline doesn’t fit with COVID. This article suggests collusion between shipping companies, and some train engineers testing positive de-stabilizing rail cargo: https://theloadstar.com/box-shortages-congestion-and-high-rates-now-hitting-china-europe-rail/ https://theloadstar.com/box-shortages-congestion-and-high-ra...
- lars_francke 6y agoMy girlfriend is in the business and it is a combination of a lot of things. There's a lack of empty containers in China, there's a lack of ships/capacity as the traffic has spiked while companies have put shipping routes on hold for a while last year, there's Brexit which delays things as lots of ships which usually go to Europe also stop in the UK, there's Chinese New Year approaching and everyone is trying to get their orders in before China effectively closes for a while (even though that might be different this year), there has also been overcapacity in the shipping industry for years and companies have worked to consolidate and reduce that which kinda seems to have worked but now comes at a bad time for everyone who wants to ship but obviously good for the shipping industry and all of this on top of a much swifter recovery than expected.... There are probably more reasons still. At least here in Europe more stuff is transported by train from China now but they're expensive as well and only account for a tiny amount of the totals. Unfortunately behind a paywall I believe https://www.economist.com/business/2020/10/10/how-covid-19-put-wind-in-shipping-companies-sails https://www.economist.com/business/2020/10/10/how-covid-19-p...
- tru3_power 6y agoWill this have any impact on medicine supply? I know that drug supply chain issues are pretty well tracked so I wonder if we will see a spike in shortages for different types of drugs.
- Scoundreller 6y agoYes and no. Pharma are high enough margin per gram/mL that they can stomach paying air freight without pushing too many extra costs to the consumer. Lots of cheap bulk components are sent by sea, but not obligated to like some hazmat. But stuff stuck at sea is stuck at sea.
- zaroth 6y ago> “Additional checks will reach consumers at a time when unemployment is lower [than during the 2020 stimulus round], mobility has significantly improved, the overall willingness to spend of the general public is up significantly, confidence levels are higher, housing is strong and the savings rate is still extremely high. That is a set-up for a consumer boom.” No, this is a perfect setup for inflation.
- millstone 6y agoI doubt it. The article observes that Americans are buying a lot of stuff, but it's just redirected purchasing. We're buying more tech, and less clothes and cars and travel. Overall the savings rate is still very high, so spending is down. There's a risk of (temporary) inflation when the economy opens back up. There is major pent-up demand for travel, but nobody will build more airports, or buy more airplanes, because it's clearly temporary. So expect some crazy prices then.
- somberi 6y agoPlease see my other post in the same thread, which refers to an article from Barron's, which posits a few reasons why higher shipping costs may not signal rising inflation.
- TabTwo 6y agoThe problem is not only the ships being stuck there, it’s also the containers. There’s a shortage of containers in Asia atm. r/supplychain has some nice articles about this and discussions about this mess go back months
- scottru 6y agoBased on the most active thread here, I think this article has accomplished its goal, which is to lead (smart) casual readers to believe that the congestion and associated delay are due to increased exports to the US because of the predicted increase in consumer spending. (This is a trade publication that wants advertisers for people who want to buy more freight! Demand is a great reason why!) In reality, I'm almost 100% sure that the real reason for the congestion is referred to in the one sentence from Hapag-Lloyd - which is that port workers in SoCal have been decimated by COVID. The massive spike of COVID cases in Los Angeles County that started ~11/1 and really hit hard by 12/1 (discussed many places), which has disproportionally impacted both POCs and workers in heavy-labor industries, is certainly impacting the supply of workers to offload and process. I've heard this anecdotally from two friends who run freight forwarding companies in SoCal. It's also worth noting that the logic around shipping ahead to predict a generic increase in consumer spending doesn't play out. Planning for a single date (Halloween costumes, Christmas toys) - of course, ship it as close to the deadline as you can, but don't f'ing miss it. But for a rolling, undated, potential increase in spending? In a world of relatively fast manufacturing, ~4 weeks to get your items from the Shenzhen terminal to offloaded in Long Beach, and with storage costs being exponentially higher in the US than in China - it makes zero sense for what will be a diffuse wave (optimistically!) of consumer spending. No major manufacturer/retailer produces that far ahead of unproven demand, and no smaller one can afford to do it (and it's not like you can get money for this). This is a staffing shortage, pure and simple. It's not going to get better for a while. [Added 30min later] BTW, I didn't see this before I posted, but Ryan Petersen (CEO of Flexport) shared on Twitter today "Yesterday there were 800 COVID-19 cases amongst the 9,000 ILWU employees who run the port of LA / Long Beach. And there was already a backlog of 29 container ships waiting to unload in the port." https://twitter.com/typesfast/status/1351942493907034112 https://twitter.com/typesfast/status/1351942493907034112
- Dunedan 6y agoHow would that explain the increased amount of TEU volume in the "Port of Los Angeles Weekly Volumes" chart shown on the site?
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- ggrrhh_ta 6y agoThis books is so appropriate here: https://www.amazon.com/Avoid-Huge-Ships-John-Trimmer/dp/0870334336 https://www.amazon.com/Avoid-Huge-Ships-John-Trimmer/dp/0870...
- TeMPOraL 6y agoI don't know what this is, but the reviews there are golden!
- ilamont 6y agoA similar logistics logjam took place last month with the US Postal Service amidst a 30%+ YOY increase in holiday shipping and thousands of workers unable to work because of COVID: https://www.govexec.com/workforce/2020/12/usps-faces-busiest-time-year-more-14000-employees-quarantined/170788/ https://www.govexec.com/workforce/2020/12/usps-faces-busiest... Keep in mind that this came on the heels of the Postmaster-initiated slowdown of most postal services in advance of U.S. elections in early November. DeJoy's staff eliminated overtime and made other changes which, along with the ongoing COVID crisis, led to sharp increases in delays in specific regions. The situation in December was exacerbated by UPS and Fedex limiting parcels from commercial shippers, which added even more volume to the shipper of last resort ... the post office. At one point the Post Office stopped scanning parcels (for us, in mid-December) and huge backlogs built up across the system. We heard from our USPS business rep in Boston that 200 workers were out sick at the processing facility in Nashua NH, leading to trucks arriving at the parking lot that couldn't be unloaded. They switched to processing Priority Mail at the facility in South Boston and everything else in Stamford CT, but they weren't able to work through the Nashua backlog until January. one Priority Mail parcel we shipped on Nov 30 that was supposed to be "3-day delivery" arrived at its destination in Kentucky 45 days later, on Jan. 13.
- mauvehaus 6y agoNashua is usually the last stop for packages before our local post office, and it was pretty much a black hole for November and December. Packages got arrival scanned there and then ... eventually they showed up at our post office up the Connecticut River. Thanks for shedding some light on what was going on and what the USPS was doing to adapt!
- somberi 6y agoOn a related note, the shipping costs have spiked around the world (approximately it is thrice as expensive to have an item shipped from China, today, than it was in May 2020). Some color in this article from Barron's: https://www.barrons.com/articles/shipping-rates-are-soaring-what-that-says-about-the-economy-and-inflation-51611077370 https://www.barrons.com/articles/shipping-rates-are-soaring-...