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We're definitely feeling the shortage of containers on the business side. Average prices of $3000 a container are now anywhere from $15,000 to $18,000 (from Sha

We're definitely feeling the shortage of containers on the business side. Average prices of $3000 a container are now anywhere from $15,000 to $18,000 (from Shanghai to Los Angeles). We've had luck actually getting the containers, the harder part is just getting them on ships (as the article states, ships can pull the rug out from under you whenever, even days before your supposed to be loaded out). A gut punch to your operating margin but still not remotely close to flipping the economics to move production. A fun side effect we've seen is the wild routing being done to find ways to move containers. Rail to this place, ship from a smaller less busy port to the opposite side of the country and rail back. Goods still arrive faster for basically the same increased price.

dragonelite 5y ago
Makes me wonder how much the BRI land routes can compete on cargo/shipment prices these days. I saw Russia jokingly promote the northern route when Suez was jammed by the Evergreen.
- rtkwe 5y ago
  Trains are going to have a hard time competing with container ships just because they’re so much narrower and shorter so they have to go much much longer to move the same amount of cargo. Trains are practically one dimensional compared to the big container ships and rail yards don’t have the space for miles long trains.
  - Quinner 5y ago
    Cargo trains are much longer than container ships (at least in the US). The average train is over a mile long, and trains that are 3 or more miles long are not uncommon. A single ship is of course still going to carry a lot more cargo, but don't underestimate the throughput of trains. https://www.gao.gov/assets/gao-19-443.pdf https://www.gao.gov/assets/gao-19-443.pdf
    - Denvercoder9 5y ago
      Trains actually get a lot closer to container ships than I had expected. With double stacking you can get up to about 1000 TEU per mile of train. Big container ships are generally about 20,000 TEU.
      - Denvercoder9 5y ago
        For posterity: I messed up the calculation, it's a little less than 500 TEU per mile of train (double stacked).
  - AnimalMuppet 5y ago
    True, trains are narrower and shorter. They can go longer, but what they really can do is be more frequent. A well-run double-track railroad can move 70 or 80 trains a day with not much difficulty. But you can't put 70 or 80 container ships through a port in a day.
    - rtkwe 5y ago
      You have to compare the destination railyard instead of the tracks. The tracks are equivalent to the sea and the port is equivalent to the railyard. They can distribute closer to the destination though but the tracks are more of a throughput limit point to point than the sea is.
      - AnimalMuppet 5y ago
        Even so, it's easier to expand a railyard (or build a new one) than it is to expand a port.
        rtkwe 5y ago
        True generally but it depends a lot on where you're trying to put the new rail yard. They'd need to be bigger to accommodate similar TEU numbers which means along the coasts you're going to have a lot more trouble finding the land to build the sprawling rail yards it'd require to move similar amounts of containers.
  - CapitalistCartr 5y ago
    In the USA, 3 mile long trains are becoming common on many long distance routes. But that's still only about 700 TEU single stacked.
    - rtkwe 5y ago
      That’s a positively tiny ship by comparison. This is a 1500 TEU ship for an example. https://www.marinetraffic.com/en/ais/details/ships/shipid:653379/mmsi:416427000/imo:9299329/vessel:YM_HARMONY https://www.marinetraffic.com/en/ais/details/ships/shipid:65... This 700 TEU ship is only 122mx18mx7m. https://shipselector.com/offers/sale/cargo-ship/container-ship/71-700-teu-alina https://shipselector.com/offers/sale/cargo-ship/container-sh...
sanjiva 5y ago
And this is a temporary reality - once the system starts operating at full steam again the costs will come down. Moving production is much more complex and requires long term policies and strategies- something most countries (other than China) seem unable to muster.
- ksec 5y ago
  >once the system starts operating at full steam again the costs will come down. I doubt it will go back to the days before pandemic, where containers and shipping are operating at literally negative profit margin. Read Hanjin Shipping. But it should hopefully ensure more healthy shipping industry.
  - Denvercoder9 5y ago
    If shipping operated at negative profit margin, how did it continue to run (until the pandemic)? I don't think it was a sexy sector that could just burn through venture capital money.
    - mikeyouse 5y ago
      Even better than VC -- tons of cheap debt. Hanjin had something like $250M in real assets and $10 Billion in debt when it collapsed.
    - deleted 5y ago
      [deleted]
    - pas 5y ago
      See also from Matt Levine: " For some reason this sort of “death-spiral financing” — issuing more and more shares at lower and lower prices — seems popular in the shipping industry; DryShips Inc. is a famous example."
- ladyattis 5y ago
  Yes, I think this will take something akin to an act of congress to force some manufacturing back. And I don't think congress has much of an appetite for that now.
pier25 5y ago
> Average prices of $3000 a container are now anywhere from $15,000 to $18,000 Is this the price of container + shipping?
- ksec 5y ago
  Not OP, but sounds about right.
- seymore_12 5y ago
  Should be shipping only, container is just the box that is used to ship your cargo in and you don't directly pay for its usage
  - pier25 5y ago
    Who owns the containers?
    - seymore_12 5y ago
      Ocean carrier i.e. Shipping line in 99.9% of the cases There are few shippers that own containers, so called shippers owned containers (SOC) but they are minority
- agrocrag 5y ago
  This is the all-in price (covers a container and spot on the boat).

dragonelite 5y ago

Makes me wonder how much the BRI land routes can compete on cargo/shipment prices these days. I saw Russia jokingly promote the northern route when Suez was jammed by the Evergreen.

rtkwe 5y ago
Trains are going to have a hard time competing with container ships just because they’re so much narrower and shorter so they have to go much much longer to move the same amount of cargo. Trains are practically one dimensional compared to the big container ships and rail yards don’t have the space for miles long trains.
- Quinner 5y ago
  Cargo trains are much longer than container ships (at least in the US). The average train is over a mile long, and trains that are 3 or more miles long are not uncommon. A single ship is of course still going to carry a lot more cargo, but don't underestimate the throughput of trains. https://www.gao.gov/assets/gao-19-443.pdf https://www.gao.gov/assets/gao-19-443.pdf
  - Denvercoder9 5y ago
    Trains actually get a lot closer to container ships than I had expected. With double stacking you can get up to about 1000 TEU per mile of train. Big container ships are generally about 20,000 TEU.
    - Denvercoder9 5y ago
      For posterity: I messed up the calculation, it's a little less than 500 TEU per mile of train (double stacked).
- AnimalMuppet 5y ago
  True, trains are narrower and shorter. They can go longer, but what they really can do is be more frequent. A well-run double-track railroad can move 70 or 80 trains a day with not much difficulty. But you can't put 70 or 80 container ships through a port in a day.
  - rtkwe 5y ago
    You have to compare the destination railyard instead of the tracks. The tracks are equivalent to the sea and the port is equivalent to the railyard. They can distribute closer to the destination though but the tracks are more of a throughput limit point to point than the sea is.
    - AnimalMuppet 5y ago
      Even so, it's easier to expand a railyard (or build a new one) than it is to expand a port.
      - rtkwe 5y ago
        True generally but it depends a lot on where you're trying to put the new rail yard. They'd need to be bigger to accommodate similar TEU numbers which means along the coasts you're going to have a lot more trouble finding the land to build the sprawling rail yards it'd require to move similar amounts of containers.
- CapitalistCartr 5y ago
  In the USA, 3 mile long trains are becoming common on many long distance routes. But that's still only about 700 TEU single stacked.
  - rtkwe 5y ago
    That’s a positively tiny ship by comparison. This is a 1500 TEU ship for an example. https://www.marinetraffic.com/en/ais/details/ships/shipid:653379/mmsi:416427000/imo:9299329/vessel:YM_HARMONY https://www.marinetraffic.com/en/ais/details/ships/shipid:65... This 700 TEU ship is only 122mx18mx7m. https://shipselector.com/offers/sale/cargo-ship/container-ship/71-700-teu-alina https://shipselector.com/offers/sale/cargo-ship/container-sh...

sanjiva 5y ago

And this is a temporary reality - once the system starts operating at full steam again the costs will come down. Moving production is much more complex and requires long term policies and strategies- something most countries (other than China) seem unable to muster.

ksec 5y ago
>once the system starts operating at full steam again the costs will come down. I doubt it will go back to the days before pandemic, where containers and shipping are operating at literally negative profit margin. Read Hanjin Shipping. But it should hopefully ensure more healthy shipping industry.
- Denvercoder9 5y ago
  If shipping operated at negative profit margin, how did it continue to run (until the pandemic)? I don't think it was a sexy sector that could just burn through venture capital money.
  - mikeyouse 5y ago
    Even better than VC -- tons of cheap debt. Hanjin had something like $250M in real assets and $10 Billion in debt when it collapsed.
  - deleted 5y ago
    [deleted]
  - pas 5y ago
    See also from Matt Levine: " For some reason this sort of “death-spiral financing” — issuing more and more shares at lower and lower prices — seems popular in the shipping industry; DryShips Inc. is a famous example."
ladyattis 5y ago
Yes, I think this will take something akin to an act of congress to force some manufacturing back. And I don't think congress has much of an appetite for that now.

pier25 5y ago

> Average prices of $3000 a container are now anywhere from $15,000 to $18,000 Is this the price of container + shipping?

ksec 5y ago
Not OP, but sounds about right.
seymore_12 5y ago
Should be shipping only, container is just the box that is used to ship your cargo in and you don't directly pay for its usage
- pier25 5y ago
  Who owns the containers?
  - seymore_12 5y ago
    Ocean carrier i.e. Shipping line in 99.9% of the cases There are few shippers that own containers, so called shippers owned containers (SOC) but they are minority
agrocrag 5y ago
This is the all-in price (covers a container and spot on the boat).