11 ms·

A little off topic, but these ports don’t usually store so many empty crates, so why do we have them now? Are we not exporting at the same rate? Is that even wh

A little off topic, but these ports don’t usually store so many empty crates, so why do we have them now? Are we not exporting at the same rate? Is that even what empty crates are used for? I’m assuming they aren’t sent back to (mostly?) China empty. I read something about the prices to ship out of the US being very high, but isn’t the price coming in also similarly proportionally high, yet we still have a backlog of ships waiting to unload.

bobthepanda 5y ago
The demand became a lot more lopsided for several reasons: * consumers were shifting spending from experiences that would've been COVID impacted (holiday travel, entertainment venues, restaurants) to online shopping * industrial supply chains in Asia were the least impacted by COVID due to the relative lack of explosion in cases there compared to the rest of the world, so we are legitimately shipping more from there and exporting less * a good chunk of the medical equipment that has been necessitated by COVID (e.g. masks) is made in Asia and that has made demand even more lopsided * there was a ship backlog because COVID impacted how ships were getting unloaded, and at one point they weren't sending back ships with empty containers to reduce turnaround times, and now there are not enough containers in China and too many in the US. Wendover Productions video: https://www.youtube.com/watch?v=b1JlYZQG3lI https://www.youtube.com/watch?v=b1JlYZQG3lI
- codezero 5y ago
  Thanks a bunch, I think others have said it was the increased demand and I didn’t quite get it, or the scale of the lopsidedness it caused, until the way you described it!
- phkahler 5y ago
  Another poster said ships that would normally take empty containers back to China are now just unloading and leaving empty. If that's the case, it seems like it's trading short term gain for a longer term problem. Make them take the empties?
  - native_samples 5y ago
    Nobody has to "make" anyone do anything in that situation. It's a classic supply/demand imbalance. Governments can't do anything here - even just getting them to pay attention to their own zoning rules required some random CEO in a boat talking to local workers then posting on Twitter. They aren't in a position to do anything better than the workers themselves can do.
deleted 5y ago
[deleted]
jldugger 5y ago
> A little off topic, but these ports don’t usually store so many empty crates, so why do we have them now? Are we not exporting at the same rate? Is that even what empty crates are used for? I’m assuming they aren’t sent back to (mostly?) China empty. My understanding is that the us doesn't send all that much back to china, and that it was a problem for a while but wasn't the bottleneck until recently.
- pc86 5y ago
  I'm surprised it isn't worth it at some level to send a boat load (literally) of empty containers back? I know not every ship will just do the round trip China<->LA but presumably at least some number of them would.
  - rdtwo 5y ago
    It is worth it in the grand scheme of things but there appears to be no mechanism to charge all the benefitting parties. There is cost shifting going on that’s creating bottlenecks
  - jldugger 5y ago
    The same podcast included a story about an entrepeneur _trying_ to ship empty containers but none of the shipping lines would eliminate the part of the lading contract that says they own the containers when you're done with it. Anyways, right now the bottleneck isn't shipping containers in China, that was an early pandemic logistics story.
algorias 5y ago
It is completely standard in the shipping industry to have lopsided routes, where one direction has 100% full containers, and the return direction a much lower percentage, like 50%. The shipping cost of different routes takes this into account.
- Jolter 5y ago
  And hence the extreme explosion in shipping prices, I assume. Anyone buying freight from China to LA now has to also pay for returning the empty. What I’ve been told is the price for shipping one container has increased 10-fold because of this.
  - baybal2 5y ago
    Yes, it's cheaper to dump the container, and buy new one in China. Sounds absurd, but that's how it is.
    - AnimalMuppet 5y ago
      Hmm. If anybody is sitting on an idea that needs used shipping containers, now might be the time to pick some up.
      - deleted 5y ago
        [deleted]
      - 908087 5y ago
        Might be a good time to build a shipping container home.
      - test6554 5y ago
        This would make a great "have a heart" trap for large animals.
      - crooked-v 5y ago
        Shipping containers are very useful for shipping and not very useful for much else.
skzv 5y ago
> Are we not exporting at the same rate? Yes. To quote JP Morgan's recent article "Dude, where's my stuff?"[0]: > The surge in US import demand has led to a sharp rise in eastbound freight rates (see charts for Shanghai->LA and Shanghai->Rotterdam). However, westbound freight rates have not risen nearly as much, leading to an odd and problematic phenomenon: incentives for container owners to move them back to China empty to accelerate receipt of eastbound freight rates, instead of waiting for containers to be refilled to earn westbound freight rates as well. This further exacerbates supply chain issues, since US goods (i.e., grains) that were supposed to depart US railcars and warehouses for export remain in place, occupying space that US imported goods were destined for. [0] https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/eye-on-the-market/dude-where-is-my-stuff/ https://am.jpmorgan.com/us/en/asset-management/institutional...
- gruez 5y ago
  That explains why we're sending them empty, but why are ports clogged with them? Shouldn't it be pretty straightforward to load them onto the next ship?
  - snypher 5y ago
    I think the next ship hasn't been unloaded yet.
skeletal88 5y ago
This is very bad for the rest of the world, and also for the US, since all the empty containers are stacking up there, then there aren't any empty containers available in China or anywhere else for exporters, so even getting your hands on an empty container can be very difficult or almost impossible, or they cost 2-3x more than usually.
- kmonsen 5y ago
  If that is true the rates for empty containers should increase making it worthwhile for ships to bring them back again?
  - kiklion 5y ago
    Elsewhere someone mentioned it’s cheaper to build a new container in China than to ship and empty one over from the US. Even if you are already sending the boat. This sort of implies that it’s incredibly cheap to make the container, and/or it’s expensive to add that weight to the ship, and/or our ports are incredibly slow at loading empty containers onto ships.
    - wrycoder 5y ago
      Jack up the daily ground rate for empty containers until the market solves the problem and clears them out. Edit: e.g. chop them, pack the result into containers, and ship it to Asia to use as raw materials for new containers.
    - Consultant32452 5y ago
      Is it possible China is subsidizing creating the new containers exacerbating this problem?
      - jpgvm 5y ago
        Nope. China has the steel. China has cheaper labour. China has more efficient logistics systems to move container from place it's constructed to a port. The answer to China being better at 99% of manufacturing isn't subsidies, it's efficiencies.

bobthepanda 5y ago

The demand became a lot more lopsided for several reasons: * consumers were shifting spending from experiences that would've been COVID impacted (holiday travel, entertainment venues, restaurants) to online shopping * industrial supply chains in Asia were the least impacted by COVID due to the relative lack of explosion in cases there compared to the rest of the world, so we are legitimately shipping more from there and exporting less * a good chunk of the medical equipment that has been necessitated by COVID (e.g. masks) is made in Asia and that has made demand even more lopsided * there was a ship backlog because COVID impacted how ships were getting unloaded, and at one point they weren't sending back ships with empty containers to reduce turnaround times, and now there are not enough containers in China and too many in the US. Wendover Productions video: https://www.youtube.com/watch?v=b1JlYZQG3lI https://www.youtube.com/watch?v=b1JlYZQG3lI

codezero 5y ago
Thanks a bunch, I think others have said it was the increased demand and I didn’t quite get it, or the scale of the lopsidedness it caused, until the way you described it!
phkahler 5y ago
Another poster said ships that would normally take empty containers back to China are now just unloading and leaving empty. If that's the case, it seems like it's trading short term gain for a longer term problem. Make them take the empties?
- native_samples 5y ago
  Nobody has to "make" anyone do anything in that situation. It's a classic supply/demand imbalance. Governments can't do anything here - even just getting them to pay attention to their own zoning rules required some random CEO in a boat talking to local workers then posting on Twitter. They aren't in a position to do anything better than the workers themselves can do.

deleted 5y ago

[deleted]

jldugger 5y ago

> A little off topic, but these ports don’t usually store so many empty crates, so why do we have them now? Are we not exporting at the same rate? Is that even what empty crates are used for? I’m assuming they aren’t sent back to (mostly?) China empty. My understanding is that the us doesn't send all that much back to china, and that it was a problem for a while but wasn't the bottleneck until recently.

pc86 5y ago
I'm surprised it isn't worth it at some level to send a boat load (literally) of empty containers back? I know not every ship will just do the round trip China<->LA but presumably at least some number of them would.
- rdtwo 5y ago
  It is worth it in the grand scheme of things but there appears to be no mechanism to charge all the benefitting parties. There is cost shifting going on that’s creating bottlenecks
- jldugger 5y ago
  The same podcast included a story about an entrepeneur _trying_ to ship empty containers but none of the shipping lines would eliminate the part of the lading contract that says they own the containers when you're done with it. Anyways, right now the bottleneck isn't shipping containers in China, that was an early pandemic logistics story.

algorias 5y ago

It is completely standard in the shipping industry to have lopsided routes, where one direction has 100% full containers, and the return direction a much lower percentage, like 50%. The shipping cost of different routes takes this into account.

Jolter 5y ago
And hence the extreme explosion in shipping prices, I assume. Anyone buying freight from China to LA now has to also pay for returning the empty. What I’ve been told is the price for shipping one container has increased 10-fold because of this.
- baybal2 5y ago
  Yes, it's cheaper to dump the container, and buy new one in China. Sounds absurd, but that's how it is.
  - AnimalMuppet 5y ago
    Hmm. If anybody is sitting on an idea that needs used shipping containers, now might be the time to pick some up.
    - deleted 5y ago
      [deleted]
    - 908087 5y ago
      Might be a good time to build a shipping container home.
    - test6554 5y ago
      This would make a great "have a heart" trap for large animals.
    - crooked-v 5y ago
      Shipping containers are very useful for shipping and not very useful for much else.

skzv 5y ago

> Are we not exporting at the same rate? Yes. To quote JP Morgan's recent article "Dude, where's my stuff?"[0]: > The surge in US import demand has led to a sharp rise in eastbound freight rates (see charts for Shanghai->LA and Shanghai->Rotterdam). However, westbound freight rates have not risen nearly as much, leading to an odd and problematic phenomenon: incentives for container owners to move them back to China empty to accelerate receipt of eastbound freight rates, instead of waiting for containers to be refilled to earn westbound freight rates as well. This further exacerbates supply chain issues, since US goods (i.e., grains) that were supposed to depart US railcars and warehouses for export remain in place, occupying space that US imported goods were destined for. [0] https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/eye-on-the-market/dude-where-is-my-stuff/ https://am.jpmorgan.com/us/en/asset-management/institutional...

gruez 5y ago
That explains why we're sending them empty, but why are ports clogged with them? Shouldn't it be pretty straightforward to load them onto the next ship?
- snypher 5y ago
  I think the next ship hasn't been unloaded yet.

skeletal88 5y ago

This is very bad for the rest of the world, and also for the US, since all the empty containers are stacking up there, then there aren't any empty containers available in China or anywhere else for exporters, so even getting your hands on an empty container can be very difficult or almost impossible, or they cost 2-3x more than usually.

kmonsen 5y ago
If that is true the rates for empty containers should increase making it worthwhile for ships to bring them back again?
- kiklion 5y ago
  Elsewhere someone mentioned it’s cheaper to build a new container in China than to ship and empty one over from the US. Even if you are already sending the boat. This sort of implies that it’s incredibly cheap to make the container, and/or it’s expensive to add that weight to the ship, and/or our ports are incredibly slow at loading empty containers onto ships.
  - wrycoder 5y ago
    Jack up the daily ground rate for empty containers until the market solves the problem and clears them out. Edit: e.g. chop them, pack the result into containers, and ship it to Asia to use as raw materials for new containers.
  - Consultant32452 5y ago
    Is it possible China is subsidizing creating the new containers exacerbating this problem?
    - jpgvm 5y ago
      Nope. China has the steel. China has cheaper labour. China has more efficient logistics systems to move container from place it's constructed to a port. The answer to China being better at 99% of manufacturing isn't subsidies, it's efficiencies.