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I'm all for burning less fuel and making shipping more efficient, but I think it is a bit of a stretch to say this particular use case is not related to finance

I'm all for burning less fuel and making shipping more efficient, but I think it is a bit of a stretch to say this particular use case is not related to finance. Ports becoming more efficient ultimately saves oil, natural gas, and other commodities companies money. Commodities traders are very tuned into port congestion and global movement of ships and make lots of money trading upon the flow of commodities (mostly oil/gas). If this particular case is not related to finance, then how come the Bloomberg terminal tells me there are exactly 401 ships in Rotterdam port as of this morning, the 5 day moving average is creeping up, and 8 of the top 10 ships by tonnage are crude oil tankers?

scott_s 15y ago
In a global economy, everything is a finite number of steps away from finance. That does not make everything in service of finance.
- gaius 15y ago
  Finance is just a way of doing resource allocation in a quantifiable way. The ideal scenario is that the cheapest option is also the most efficient (or vice versa, depending on how you think about it). The finance industry is a highly abstract way of finding the methods for creating the most wealth (for any given definition) while consuming the fewest resources. That's called "return on investment".
  - scott_s 15y ago
    I don't disagree with what you said. My comment was in response to what I saw as the claim that just because something impacts the financial industry, it's related to the financial industry in a meaningful way. That reasoning could be applied to just about everything, which means it's a meaningless distinction.
- apaprocki 15y ago
  Believe me, I don't disagree. I'm just talking about the example of ports/shipping because of the huge amount of money moved around in commodity trading. If the example was applying this to say, trunk congestion/scheduling on the nation's highways, it would be a completely different story since traders don't care about (i.e. trade on) that information.
jamesbkel 15y ago
Well, I think the distinction is that the techniques were originally designed to improve the response to the state of, for example, shipping in Rotterdam. That is, the traders didn't particularly care if the shipping patterns were the most efficient possible, but that they were making the best trades based on observed patterns. I believe the point of the article is that now these same techniques are being used to instruct the markets they were originally designed to simply monitor.
- apaprocki 15y ago
  I guess what got me thinking about it is because physical oil/gas traders have demurrage clauses in the contracts which kick in when a tanker is unable to offload its cargo by a certain time. This translates port congestion directly into hard cash that has to change hands, so for this specific problem that class of traders do very much care about the efficiency of the shipping patterns.

scott_s 15y ago

In a global economy, everything is a finite number of steps away from finance. That does not make everything in service of finance.

gaius 15y ago
Finance is just a way of doing resource allocation in a quantifiable way. The ideal scenario is that the cheapest option is also the most efficient (or vice versa, depending on how you think about it). The finance industry is a highly abstract way of finding the methods for creating the most wealth (for any given definition) while consuming the fewest resources. That's called "return on investment".
- scott_s 15y ago
  I don't disagree with what you said. My comment was in response to what I saw as the claim that just because something impacts the financial industry, it's related to the financial industry in a meaningful way. That reasoning could be applied to just about everything, which means it's a meaningless distinction.
apaprocki 15y ago
Believe me, I don't disagree. I'm just talking about the example of ports/shipping because of the huge amount of money moved around in commodity trading. If the example was applying this to say, trunk congestion/scheduling on the nation's highways, it would be a completely different story since traders don't care about (i.e. trade on) that information.

jamesbkel 15y ago

Well, I think the distinction is that the techniques were originally designed to improve the response to the state of, for example, shipping in Rotterdam. That is, the traders didn't particularly care if the shipping patterns were the most efficient possible, but that they were making the best trades based on observed patterns. I believe the point of the article is that now these same techniques are being used to instruct the markets they were originally designed to simply monitor.

apaprocki 15y ago
I guess what got me thinking about it is because physical oil/gas traders have demurrage clauses in the contracts which kick in when a tanker is unable to offload its cargo by a certain time. This translates port congestion directly into hard cash that has to change hands, so for this specific problem that class of traders do very much care about the efficiency of the shipping patterns.