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I am a member of ILWU 13. A couple thoughts after reading the comments: The zoning change is for TEU storage outside the port. The port itself was not subject

I am a member of ILWU 13. A couple thoughts after reading the comments: The zoning change is for TEU storage outside the port. The port itself was not subject to that rule. The Port of Los Angeles is a landlord and is not directly involved in operations. Private companies, such as APM, EverPort, and others, rent piers/berths and are responsible for the actual operations and logistics. Some speculation: recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty. I suspect this behavior is what turned the congestion we had before into the quasi deadlock we have now.

rossjudson 5y ago
Seems like more of a tragedy of the commons, with each ship (A) assuming it's fine to leave empty because some other ship (B) will grab the empty containers. That's all well and good until (A) comes back, and then it sits there waiting like everyone else. Going back empty works once. Or more times if you're headed to a different market, I suppose.
- singularity2001 5y ago
  I thought the price for containers had more than quadrupled. How can leaving them behind be economic?
  - native_samples 5y ago
    I believe that's not the price for the physical box but rather "a container's worth of shipping". Empty containers are probably going up in price a lot now too - I don't really see why Ryan thinks there needs to be military intervention here. A shortage of empties in China and a surplus in the USA will get resolved real quick by people on the ground (=within the latencies afforded by the slow speed of ships themselves) as there's money to be made there.
aazaa 5y ago
> ... recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty. If this is happening, what would be the consequences of allowing even more TEUs to be stored on the US side?
- Veliladon 5y ago
  Shit is going to take longer and be more expensive to come from China because when there isn't a TEU available you have to wait for one to be fabbed and pay for it.
  - rdtwo 5y ago
    Yeah but the ship operators don’t pay for this so everyone is optimized for personal profit not system efficiency
schainks 5y ago
Is someone paying for ships to do this or are they doing their own calculations and realizing it’s cheaper for them to leave fast?
- anonymouse008 5y ago
  This is the question that ties into mine — if the economic incentives have changed (i.e. there is no penalty for renters of containers to not get containers back to their primary shipper) then this is a perfectly reasonable response to the change from Covid to today — i.e. the new game is moving the ship as fast as possible with no downtime. If the demurrage is still incurred, then there’s some other alternatives that do not appear to be completely without nefarious intent.
  - schainks 5y ago
    I can’t help but think these decisions are being made on some assumptions from data produced by buggy software algorithms… Hopefully we’re doing better than that!
- antman 5y ago
  And what is the delay time if the ships decide to wait to load containers for the return?
- rdtwo 5y ago
  If a single extra trip is lucrative enough and at current rates it’s 5-10 regular prices that would make sense to forgo loading in the us and just hurry home
  - bombcar 5y ago
    For awhile that’s beneficial to the shipper until all containers are empty in LA and none exist in China to fill.
    - hansel_der 5y ago
Kye 5y ago
TEU, for people like me who don't know shipping lingo: https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit
anonymouse008 5y ago
Question: who is paying demurrage on these containers? Has that practice been suspended?

rossjudson 5y ago

Seems like more of a tragedy of the commons, with each ship (A) assuming it's fine to leave empty because some other ship (B) will grab the empty containers. That's all well and good until (A) comes back, and then it sits there waiting like everyone else. Going back empty works once. Or more times if you're headed to a different market, I suppose.

singularity2001 5y ago
I thought the price for containers had more than quadrupled. How can leaving them behind be economic?
- native_samples 5y ago
  I believe that's not the price for the physical box but rather "a container's worth of shipping". Empty containers are probably going up in price a lot now too - I don't really see why Ryan thinks there needs to be military intervention here. A shortage of empties in China and a surplus in the USA will get resolved real quick by people on the ground (=within the latencies afforded by the slow speed of ships themselves) as there's money to be made there.

aazaa 5y ago

> ... recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty. If this is happening, what would be the consequences of allowing even more TEUs to be stored on the US side?

Veliladon 5y ago
Shit is going to take longer and be more expensive to come from China because when there isn't a TEU available you have to wait for one to be fabbed and pay for it.
- rdtwo 5y ago
  Yeah but the ship operators don’t pay for this so everyone is optimized for personal profit not system efficiency

schainks 5y ago

Is someone paying for ships to do this or are they doing their own calculations and realizing it’s cheaper for them to leave fast?

anonymouse008 5y ago
This is the question that ties into mine — if the economic incentives have changed (i.e. there is no penalty for renters of containers to not get containers back to their primary shipper) then this is a perfectly reasonable response to the change from Covid to today — i.e. the new game is moving the ship as fast as possible with no downtime. If the demurrage is still incurred, then there’s some other alternatives that do not appear to be completely without nefarious intent.
- schainks 5y ago
  I can’t help but think these decisions are being made on some assumptions from data produced by buggy software algorithms… Hopefully we’re doing better than that!
antman 5y ago
And what is the delay time if the ships decide to wait to load containers for the return?
rdtwo 5y ago
If a single extra trip is lucrative enough and at current rates it’s 5-10 regular prices that would make sense to forgo loading in the us and just hurry home
- bombcar 5y ago
  For awhile that’s beneficial to the shipper until all containers are empty in LA and none exist in China to fill.
  - hansel_der 5y ago

Kye 5y ago

TEU, for people like me who don't know shipping lingo: https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit

anonymouse008 5y ago

Question: who is paying demurrage on these containers? Has that practice been suspended?