6 ms·

If they won't take back the empties, what do they expect to be done with them? Where are they getting containers to fill in the first place? What is going on?!

HWR_14 5y ago
The demand for shipping throughput is so high that it is cheaper to have the Chinese build new containers and have them filled and waiting at the docks than pay the extra time to have the empties loaded in the US then unloaded in China. This will change at some point, but until then there's no point in bringing the empties back. It's literally not worth the hassle. Honestly, it might go on long enough that figuring how to smelt the containers might be viable given the high cost of metals.
- kabes 5y ago
  But if there are no trucks to unload the ship, since they're all occupied with empties, who's unloading the ship? Wouldn't this mean delays in unloading, and thus incentive for the shipping companies to take the empties back?
- kansface 5y ago
  A container must cost at least a couple thousand dollars... a ship carries, what, 1000 or so? That's roughly 2 million dollars being "thrown away". Maybe they can build them for half that in China? I suppose if the turnaround time is in months, this makes sense. Someone will make a tidy profit returning the containers at some point (although I have no idea what their lifecycle is like).
  - HWR_14 5y ago
    Ultralarge ships (top 161 in the world edit: that number of ships is a decade old, sorry) all carry at least 5,000 40' containers (and up to 10,000). That sounds like a lot, but right now the Chinese factories are cranking out about the 600,000 a quarter. (Note, I'm talking about 40' containers, but the industry talks about 20' so you may find double my numbers on a search.) They seem to cost about 2,500-4,000 to purchase new, so theoretically they could make 20-28MM loading them with empties (if they were worth the same as new). I don't know how long it would take to load the ships with cargo, but there are currently $24MMM (that's 24 billion) in goods anchored outside the port of LA waiting to be unloaded. So 3 orders of magnitude higher. How much of a premium must load/unload capacity be at right now? If we weren't truck limited, we could just move all the empties far away and stockpile them until they can be profitably returned. But I know people who have tens-of-thousands of dollars in tons of raw materials (think universal inputs) stacked in a warehouse they have to vacate soon and they cannot even give it away because of transportation costs. They're going to have to pay someone to take away the things they (correctly assumed) they could buy for almost nothing last year and would be worth more today.
    - dredmorbius 5y ago
      Note that containership capacity is specified in "TEU" (twenty-foot equivalent units), based on the original shipping container specification, but that the vast bulk of containers are forty feet in length. So the Maersk E-class capacity of 10k--14k TEU translates to 5k--7k containers of the size you're probably used to seeing. https://en.wikipedia.org/wiki/E-class_container_ship https://en.wikipedia.org/wiki/E-class_container_ship https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit
      - bkor 5y ago
        To add: 14k TEU capacity is considered tiny nowadays. The biggest vessels are 20k+ TEU (e.g. 22k). A 40' container is either 2 or 2.25 TEU. The .25 is when the container is a bit higher than standard. Though nowadays loads of containers are a bit higher. The extra .25 is ignored in various cases (basically when it doesn't matter).
        dredmorbius 5y ago
        Actually just under 24k for the Evergreen A-class ships (23,992), I'm just discovering: https://en.wikipedia.org/wiki/Evergreen_A-class_container_ship https://en.wikipedia.org/wiki/Evergreen_A-class_container_sh... https://en.wikipedia.org/wiki/List_of_largest_container_ships https://en.wikipedia.org/wiki/List_of_largest_container_ship...
      - HWR_14 5y ago
        > Note that containership capacity is specified in "TEU" (twenty-foot equivalent units), based on the original shipping container specification, but that the vast bulk of containers are forty feet in length. I did in fact note that: >> (Note, I'm talking about 40' containers, but the industry talks about 20' so you may find double my numbers on a search.)
        dredmorbius 5y ago
        I found your comment confusing and inaccurate on the point of container measures. There's a specific standard for describing sizes (TEU), and, confusingly, an overwhelmingly prevalent size actually used and which most people will be familiar with of precisely twice that length (40'). The ships you referenced would be carrying 5--10k TEU, not 5--10k 40' containers. Its' a minor point in the context of the Flexport story, but the inaccuracy seemed worth clarification. That is all.
- Robotbeat 5y ago
  From what I can tell, a used 40ft container costs almost $4000 and weighs over 4 tonnes empty, and given scrap steel prices, that's about $2000 worth of scrap metal (potentially more, depending on the port and the month...)
- SyzygistSix 5y ago
  Perhaps there's a cheap housing made of shipping containers initiative in this opportunity?

HWR_14 5y ago

The demand for shipping throughput is so high that it is cheaper to have the Chinese build new containers and have them filled and waiting at the docks than pay the extra time to have the empties loaded in the US then unloaded in China. This will change at some point, but until then there's no point in bringing the empties back. It's literally not worth the hassle. Honestly, it might go on long enough that figuring how to smelt the containers might be viable given the high cost of metals.

kabes 5y ago
But if there are no trucks to unload the ship, since they're all occupied with empties, who's unloading the ship? Wouldn't this mean delays in unloading, and thus incentive for the shipping companies to take the empties back?
kansface 5y ago
A container must cost at least a couple thousand dollars... a ship carries, what, 1000 or so? That's roughly 2 million dollars being "thrown away". Maybe they can build them for half that in China? I suppose if the turnaround time is in months, this makes sense. Someone will make a tidy profit returning the containers at some point (although I have no idea what their lifecycle is like).
- HWR_14 5y ago
  Ultralarge ships (top 161 in the world edit: that number of ships is a decade old, sorry) all carry at least 5,000 40' containers (and up to 10,000). That sounds like a lot, but right now the Chinese factories are cranking out about the 600,000 a quarter. (Note, I'm talking about 40' containers, but the industry talks about 20' so you may find double my numbers on a search.) They seem to cost about 2,500-4,000 to purchase new, so theoretically they could make 20-28MM loading them with empties (if they were worth the same as new). I don't know how long it would take to load the ships with cargo, but there are currently $24MMM (that's 24 billion) in goods anchored outside the port of LA waiting to be unloaded. So 3 orders of magnitude higher. How much of a premium must load/unload capacity be at right now? If we weren't truck limited, we could just move all the empties far away and stockpile them until they can be profitably returned. But I know people who have tens-of-thousands of dollars in tons of raw materials (think universal inputs) stacked in a warehouse they have to vacate soon and they cannot even give it away because of transportation costs. They're going to have to pay someone to take away the things they (correctly assumed) they could buy for almost nothing last year and would be worth more today.
  - dredmorbius 5y ago
    Note that containership capacity is specified in "TEU" (twenty-foot equivalent units), based on the original shipping container specification, but that the vast bulk of containers are forty feet in length. So the Maersk E-class capacity of 10k--14k TEU translates to 5k--7k containers of the size you're probably used to seeing. https://en.wikipedia.org/wiki/E-class_container_ship https://en.wikipedia.org/wiki/E-class_container_ship https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit
    - bkor 5y ago
      To add: 14k TEU capacity is considered tiny nowadays. The biggest vessels are 20k+ TEU (e.g. 22k). A 40' container is either 2 or 2.25 TEU. The .25 is when the container is a bit higher than standard. Though nowadays loads of containers are a bit higher. The extra .25 is ignored in various cases (basically when it doesn't matter).
      - dredmorbius 5y ago
        Actually just under 24k for the Evergreen A-class ships (23,992), I'm just discovering: https://en.wikipedia.org/wiki/Evergreen_A-class_container_ship https://en.wikipedia.org/wiki/Evergreen_A-class_container_sh... https://en.wikipedia.org/wiki/List_of_largest_container_ships https://en.wikipedia.org/wiki/List_of_largest_container_ship...
    - HWR_14 5y ago
      > Note that containership capacity is specified in "TEU" (twenty-foot equivalent units), based on the original shipping container specification, but that the vast bulk of containers are forty feet in length. I did in fact note that: >> (Note, I'm talking about 40' containers, but the industry talks about 20' so you may find double my numbers on a search.)
      - dredmorbius 5y ago
        I found your comment confusing and inaccurate on the point of container measures. There's a specific standard for describing sizes (TEU), and, confusingly, an overwhelmingly prevalent size actually used and which most people will be familiar with of precisely twice that length (40'). The ships you referenced would be carrying 5--10k TEU, not 5--10k 40' containers. Its' a minor point in the context of the Flexport story, but the inaccuracy seemed worth clarification. That is all.
Robotbeat 5y ago
From what I can tell, a used 40ft container costs almost $4000 and weighs over 4 tonnes empty, and given scrap steel prices, that's about $2000 worth of scrap metal (potentially more, depending on the port and the month...)
SyzygistSix 5y ago
Perhaps there's a cheap housing made of shipping containers initiative in this opportunity?