While everyone has been dumping on the ports, don't the shipping lines have exclusive use of certain areas? That would give them quite a bit of control on what happens to their containers and when their ships are unloaded.
Euclid ... Otherwise they have to raise the price of shipping to cover the empty container return cost.
The cost to return empties is built into the head haul rate.
Mac
PNWRMNM Euclid ... Otherwise they have to raise the price of shipping to cover the empty container return cost. The cost to return empties is built into the head haul rate. Mac
Then why aren't the empties being returned? It must be that the return charge is not high enough to attract return business. That would suggest raising the return charge to incentivize the return. Fill the return ships with exports and top them out with returned empties. Then buy more ships if necessary to keep up with the rest of the return demand.
But also implement ways to lower the cost of returns by reducing the size of empty containers, as I mentioned above.
EuclidThen why aren't the empties being returned?
If they are getting paid for the return leg "up front", but not actually incurring the expense of the return, isn't the answer to that question self evident?
Euclid If they could reduce the bulk of empty containers, It may be cost effective to return them and save the cost of manufacturing new ones. I mentioned cutting them up here to reduce the bulk and return them for their scrap value. But I suspect high labor cost to cut them up would eat up the scrap value. So instead, maybe the containers could be made with their panels lock-pinned together in a way that they could be quickly collapsed into the smallest possible volume to fill a ship to its maximum weight capacity. Then upon return to Asia, the containers could be reset to their full volume size.
If they could reduce the bulk of empty containers, It may be cost effective to return them and save the cost of manufacturing new ones. I mentioned cutting them up here to reduce the bulk and return them for their scrap value. But I suspect high labor cost to cut them up would eat up the scrap value. So instead, maybe the containers could be made with their panels lock-pinned together in a way that they could be quickly collapsed into the smallest possible volume to fill a ship to its maximum weight capacity.
Then upon return to Asia, the containers could be reset to their full volume size.
Convicted One Euclid Then why aren't the empties being returned? If they are getting paid for the return leg "up front", but not actually incurring the expense of the return, isn't the answer to that question self evident?
Euclid Then why aren't the empties being returned?
Yes, and I suspect that is the problem. They can get away with not taking the empty containers back so they don't do it. Meanwhile, they probably get paid what ever is allowed for taking them back. And also they can haul more payload for more income than what they get for hauling empty containers. So it sounds like a legal problem with a requirement to return the empties, but no way to enforce that. So the empties pile up to the moon because nothing can be done about it. Meanwhile ports and other players will raise rates to cover the problem of containers to the moon, and after this season, consumers will be exhausted and not want to hear about supply chains or Asian products ever again.
Euclid and Convicted One,
You are getting more excited about carriers leaving empties on the dock than is warrented.
If a carrier wants loads it has to supply empties. That limits the incentive to not put empty boxes onto the westbound ship.
PNWRMNMEuclid and Convicted One, You are getting more excited about carriers leaving empties on the dock than is warrented. If a carrier wants loads it has to supply empties. That limits the incentive to not put empty boxes onto the westbound ship. Mac
Most containers are manufacturered in SE Asia. Because I don't know - I suspect the carriers have found it more profitable to build new containers to handle the traffic out of Asia than it is to return empties from the USA back to Asia for reloading.
Keeping loaded containers on their vessels helps their bottom lines. Putting empties on the vessels would hurt the bottom line.
Never too old to have a happy childhood!
How about----if you bring in 10 containers to any ouf the US ( maybeCanada and Mexico as well ) port you will take out 10 containers full or empty?
The port of Savannah is moving containers almost immediately inland by train or truck to the NS and CSX inland ports. Their backlog of ships was around (15-20 ?) and now down to 7. We have a used container yard in Newnan but have not priced them in a while.
PNWRMNM Euclid and Convicted One, You are getting more excited about carriers leaving empties on the dock than is warrented. If a carrier wants loads it has to supply empties. That limits the incentive to not put empty boxes onto the westbound ship. Mac
I don't understand that. I appears that there is not enough incentive or need to put empties on the eastbound ships, so they are piling up in California. I am hearing that is being considered to be a big problem because it is imposing costs on our supply chain to store and work around all the empty containers.
So what is needed is more incentive. There is an incentive for drivers to break the speed limit, but rather than just let them, we create an incentive for drivers to not break the speed limit.
I think the most logical way to incentivise the return of empties is to make it more cost effective. One way to make it more cost effective is to reduce the return shipping cost by coming up with a better container. But there are many other ways as well. All of them will add cost to shipping. And too much cost will reduce shipping demand. So the only question is: "Can container return be accomplished without adding cost sufficient to adversly lower demand for shipping?" If the anwer is yes, then do that. If the answer is no, then the shipping business has priced itself out of the market.
Simply letting containers pile up here because there is no demand for their return cannot be a solution. It is--- Unsustainable
EuclidSimply letting containers pile up here because there is no demand for their return cannot be a solution. It is--- Unsustainable
Agree piling up empty boxes is unsustainable.
There is plenty of demand for them in China and other Asian export regions.
To the extent the carriers are leaving empty boxes on the west coast I think three things. One, carriers are trying to get their ships back for the next load after wasting days waiting for a port slot so they do not want to spend the time to pick up empty boxes. Two, the carriers need to take empties so the boxes can be reloaded with paying freight. Three, transportation capacity is perishable, so not filling westbound ship slots with empty containers is penny wise and pound foolish.
[quote user="PNWRMNM"]
Euclid Simply letting containers pile up here because there is no demand for their return cannot be a solution. It is--- Unsustainable
[quote user="Euclid]
[/quote]
Yes, I agree with your three conclusions as to the reason empty containers are not being returned. I can understand why shipping companies would be acting accordingly. It seems that someone needs to be tasked with the return obligation and paid enough to want the job.
Fundamentally, it seems that it would be natural for the shipping comanies themselves to take on this task. But they might be just too focused on the delivery function to shift gears and provide the return function, and especially if the return function does not pay as well as the delivery function. So the job is not getting done because nobody is paying to have it done.
Somebody has to pay. Most logically, that would be either the exporter, the importer, or the end receiver; or a combination. If the exporter and the importer won't pay it, the U.S. consumer must pay it. If they won't pay it, they will lose the import supply. If they lose the supply, a new supply will be found and offered that does not have the cost of returning containers thousands of miles back to their origination. That will be a supply that is nearer to the U.S. The closest supply is in the U.S.
Most importantly, this whole dynamic is making U.S. manufactureing potentially the lowest bidder. It is ironic because originally U.S. manufacturing lost much of the business due to China being the lowest bidder.
Aren't we all saying supply and demand will sort it; but not as quickly as some may wish. As a result some will suffer but not beyond recovery if they are prudent with their decisions.
LOL, I guess it would look bad for them to charge $20,000 for transit of a loaded container from Asia, while only charging $1000 to send it back, so they are dodging the bullet, trying to avoid allegations of opportunism and gouging?
It's gotta cost less than $20,000 to build a container new?
Could it be as simple as the ships are not being completely unloaded in LA, and are planning to continue on towards the ports in Mexico for final unloading, and simply do not want empty containers placed on top of loads they still have to get rid of?
Convicted OneLOL, I guess it would look bad for them to charge $20,000 for transit of a loaded container from Asia, while only charging $1000 to send it back, so they are dodging the bullet, trying to avoid allegations of opportunism and gouging? It's gotta cost less than $20,000 to build a container new? Could it be as simple as the ships are not being completely unloaded in LA, and are planning to continue on towards the ports in Mexico for final unloading, and simply do not want empty containers placed on top of loads they still have to get rid of?
Vessels involved in 'liner' service service multiple ports on both sides of the ponds they navigate - as such the vessels are rarely if ever 'completely' unload. They arrive Port A with 10K boxes, unload 1K and load 2K and then sail to Port B where another 1K are unloaded and 2 K more are loaded - now the vessel has 12K boxes on board and sails to Port C where 6K boxes are unloaded and 2 K boxes are loaded and then on to Port D where 1K boxes are unloaded and 7K boxes are loaded and then it sails back to Port A - the sequence of ports will remain the same the count of boxes will fluctuate with traffic volume.
Who owns the container boxes? I see the ship company names on the boxes, so my guess is that they own them. Regardless of who owns them, why don't the ports and others who store the empty boxes, charge increasing space rental (like RRs do) to try to get them moved out?
[quote user="MidlandMike"]
I am not re-asking why the shipping companies are not picking up the empties. I am specifically asking who owns the containers. This is to identify who is legally responsible for the empty containers. If the containers are eventually abandoned, it is illegal dumping, and a violation of environmental laws. If the ports or others who store the containers don't hold the owners ultimatly to their legal obligations, then the property owners may be held as a potentially responsible party depending on state/federal laws. Contractual obligations don't nullify these laws. The ports are componding their own problems which they will ultimatly have to solve.
MidlandMikeI am specifically asking who owns the containers.
In theory, one would imagine that the name (and/or reporting marks) on the containers would indicate the owner. But, there's always a "but," that doesn't address the possibility that the container is actually leased to another entity.
I have no idea how that whole arrangement works.
A while back, our firefighter's association bought a container for storage at our training center. Barring outright theft, one would assume that the outfit we bought it from had acquired it from its previous owner. There's quite a market for such containers for everything from storage to tiny homes.
Will some of the containers in question end up in that marketplace, vs getting shipped back for another load?
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tree68In theory, one would imagine that the name (and/or reporting marks) on the containers would indicate the owner. But, there's always a "but," that doesn't address the possibility that the container is actually leased to another entity.
My recollection (for Michigan environmental law) was that financial institutions such as mere lease holders were not held responsible.
Okay to be able to add some numbers to the conversation may I recommend to YouTube channels, and specifically two particular videos.
First Chief MAKOi's channel considering the costs to divert a containership from LA to Florida, this gives an idea of daily operating costs of a Panamax containership.
Divert to Florida
Sal Mercagliano also has a YouTube channel covering shipping issues. He is a former Merchant Mariner and has a PhD in History, and teaches at Campbell University in South Carolina.
Shipping vlog
John
1) More container storage slots, either by expanding the existing slot array or by adding another array on available land some distance away from the port.
2) New mechanism at the port to dramatically speed up container handling in retrieving containers from the array or placing them into the array. Instead of human crane operators manually operating cranes, what is needed is an automatic crane that can act much quicker. If a container must be retrieved from a stack that has three containers on top of it that have to be moved for the retrieval; the automated crane system would lift the three blocking containers together high enough to allow a secondary crane action to go in that pick up the intended container, and pull it out from beneath the stack of suspended containers. Then the stack of three suspended containers would be set back down. With an automated crane system, this entire move might be completed within 30 seconds.
What is amusing about this is that the necessary information to do this sort of predictive loading and staging has existed for well over 40 years, as has the periodic emergence of the bright idea of utilizing the 'return time' of the loading cranes so that each unloaded container shift is matched by a reverse loading move.
In practice the economy has always been to gang-unload shipborne blocks, often to ground storage, and then gang-load to the ship. There are a variety of reasons why this traditionally worked better, and I still don't quite understand why the idea of gang-unloading to trains of stack equipment that can be rolled in and out of the port to holding tracks, rather than to ground locations, isn't a preferred solution to some of the internal congestion being reported.
One of the 'correct' approaches that should be tried here is to find ways to get the longshoreman-union crews to 'work smart' by running cranes more quickly but with less complexity or uncertainty when picking or placing containers. While governments and PSR-style carriers may try to solve this with various fines, threats of penalties, or fees of various kinds, the only correct answer is to enhance effective throughput productivity, given the understanding that one crane move can't assuredly be made to move the container from ship to final mode directly at a particular specified time.
Something I tinkered with after reading that 'case for the double-track train' article in Trains was the idea of building large skeleton flats that would span multiple tracks and be able to be crane-loaded several units high; all the containers from a ship would be bulk-unloaded ASAP onto this, and it would then be moved to the actual 'intermodal' part of a facility... perhaps at some distance over an appropriate double-track-train compatible route... where differently-specialized equipment could bind on in parallel to shift containers to trucks or trains or various areas of transient to long-term storage.
Have shipping lines ever merged their container inventories and operated them like a pool? That would speed loading empties to send back overseas since crane operator would not need to look for specific container at the bottom of the pile.seems like shipping companies need a TTX type arrangement.
OvermodWhat is amusing about this is that the necessary information to do this sort of predictive loading and staging has existed for well over 40 years, as has the periodic emergence of the bright idea of utilizing the 'return time' of the loading cranes so that each unloaded container shift is matched by a reverse loading move.
The other day I stumbled upon my April 2020 issue of Trains. In it is an article about a container terminal that I don't believe has been mentioned here - Prince Rupert, BC.
The port has a capacity of well over a million TEU a year, and that's growing.
But that's not why I bring that article up. Rather, it's the portion of the article that discusses exactly what Overmod mentions - finding back loads for the container ships. CN was actively doing so at that point in time, according to the article.
That includes some new capabilities at Prince Rupert for transloading.
Of course, taking on such a task requires people - marketing - and P$R does not look kindly at such expenses. Therein lies a conunudrum.
I doubt if empty containers operate on a FIFO plan. An empty container is an empty container, as long as it's one that you own.
BackshopI doubt if empty containers operate on a FIFO plan. An empty container is an empty container, as long as it's one that you own.
They may if they are subjected to a demurrage system that charges for days held based on individual container numbers.
tree68 Overmod What is amusing about this is that the necessary information to do this sort of predictive loading and staging has existed for well over 40 years, as has the periodic emergence of the bright idea of utilizing the 'return time' of the loading cranes so that each unloaded container shift is matched by a reverse loading move. The other day I stumbled upon my April 2020 issue of Trains. In it is an article about a container terminal that I don't believe has been mentioned here - Prince Rupert, BC. The port has a capacity of well over a million TEU a year, and that's growing. But that's not why I bring that article up. Rather, it's the portion of the article that discusses exactly what Overmod mentions - finding back loads for the container ships. CN was actively doing so at that point in time, according to the article. That includes some new capabilities at Prince Rupert for transloading. Of course, taking on such a task requires people - marketing - and P$R does not look kindly at such expenses. Therein lies a conunudrum.
Overmod What is amusing about this is that the necessary information to do this sort of predictive loading and staging has existed for well over 40 years, as has the periodic emergence of the bright idea of utilizing the 'return time' of the loading cranes so that each unloaded container shift is matched by a reverse loading move.
Balancing incoming loads with backloads would solve the problem if port capacity was increased to handle the extra traffic. But the larger question is, where do you find the backloads? Anything that has to move from here to Asia is already being shipped. So the loads coming to here and the loads going to there are naturally occurring according to demand.
The problem is that far more is coming here than what is going back. So it seems like we would have to start new businesses here that are competitive enough to generate new Asia bound traffic that balances our trade with them. That would certainly solve the return container problem, but how do you create and sell the new products that call for new shipping eastward?
BaltACD Backshop I doubt if empty containers operate on a FIFO plan. An empty container is an empty container, as long as it's one that you own. They may if they are subjected to a demurrage system that charges for days held based on individual container numbers.
Backshop I doubt if empty containers operate on a FIFO plan. An empty container is an empty container, as long as it's one that you own.
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