California’s container-ship traffic jam
freightwaves.com
freightwaves.com
In reality, I'm almost 100% sure that the real reason for the congestion is referred to in the one sentence from Hapag-Lloyd - which is that port workers in SoCal have been decimated by COVID. The massive spike of COVID cases in Los Angeles County that started ~11/1 and really hit hard by 12/1 (discussed many places), which has disproportionally impacted both POCs and workers in heavy-labor industries, is certainly impacting the supply of workers to offload and process. I've heard this anecdotally from two friends who run freight forwarding companies in SoCal.
It's also worth noting that the logic around shipping ahead to predict a generic increase in consumer spending doesn't play out. Planning for a single date (Halloween costumes, Christmas toys) - of course, ship it as close to the deadline as you can, but don't f'ing miss it. But for a rolling, undated, potential increase in spending? In a world of relatively fast manufacturing, ~4 weeks to get your items from the Shenzhen terminal to offloaded in Long Beach, and with storage costs being exponentially higher in the US than in China - it makes zero sense for what will be a diffuse wave (optimistically!) of consumer spending. No major manufacturer/retailer produces that far ahead of unproven demand, and no smaller one can afford to do it (and it's not like you can get money for this).
This is a staffing shortage, pure and simple. It's not going to get better for a while.
[Added 30min later]
BTW, I didn't see this before I posted, but Ryan Petersen (CEO of Flexport) shared on Twitter today
"Yesterday there were 800 COVID-19 cases amongst the 9,000 ILWU employees who run the port of LA / Long Beach. And there was already a backlog of 29 container ships waiting to unload in the port."
In other words, it includes the backlog that's building up. "Expects to handle" isn't the same as "can handle." That's going to go up until the backlog is cleared.
(There is data that could prove me right or wrong, but the article doesn't provide it.)
[0] https://www.cnbc.com/2020/11/23/retail-trade-group-forecasts...
[1] https://www.bls.gov/news.release/empsit.nr0.htm
[2] https://gcaptain.com/covid-restocking-surge-continues-at-por...
[3] https://www.latimes.com/business/story/2020-11-22/shipping-c...
“Terminals are working with limited labor and split shifts,” it said, asserting that this is related to COVID. “This labor shortage affects all terminals’ TAT [turnaround time] for truckers, inter-terminal transfers and the number of daily appointments available for gate transactions and delays our vessel operations.”
What does POC mean in this context? I come from software engineering and in my world it is an acronym for proof of concept, but it looks like it's about something entirely different here.
In medical fields it refers to plan of care.
The general narrative seems to be that unless you're older and/or obese, Covid doesn't usually affect you much (yes there are outliers). I would imagine the port workers to be physically fit - is this a misconception?
Coronavirus has many, many, MANY ways of affecting a person for decades to come, and we're learning more about it every day.
Edit: since I'm getting downvoted, I assume this comes from people who want sources, so here they are:
- https://www.cbsnews.com/news/covid-lungs-scarring-smokers-lu...
- https://www.helmholtz.de/en/health/what-damage-is-potentiall...
Though one manages it in a few weeks while the other takes decades.
that seems like a very low bar to set
A bike is like a car. It has wheels and you ride it from point A to B.
> While the true mortality of COVID-19 will take some time to fully understand, the data we have so far indicate that the crude mortality ratio (the number of reported deaths divided by the reported cases) is between 3-4%, the infection mortality rate (the number of reported deaths divided by the number of infections) will be lower. For seasonal influenza, mortality is usually well below 0.1%. However, mortality is to a large extent determined by access to and quality of health care.
> While the range of symptoms for the two viruses is similar, the fraction with severe disease appears to be different. For COVID-19, data to date suggest that 80% of infections are mild or asymptomatic, 15% are severe infection, requiring oxygen and 5% are critical infections, requiring ventilation. These fractions of severe and critical infection would be higher than what is observed for influenza infection.
https://www.who.int/emergencies/diseases/novel-coronavirus-2...
And aside from that, a large problem with covid-19 is the DDoS on the health care system stemming from the severe infection rates, which can create large second order effects.
I feel you are being willfully ignorant, and I have to suggest you look into the severity of COVID and the statistics so far. It's been going on for over a year now, the information is out there.
So 0.1% probably is the correct order of magnitude.
Same applies at smaller scale for other factors in baseline mortality, like traffic deaths and industrial accidents, that have also been suppressed by policy and behavior changes due to the pandemic.
It's quite likely that most of the workers in question aren't worse off than with a "normal" flu, but they're still going to be away from work for a while.
Someone defined the difference as "if you think you're going to die, and feel that dying might be better than staying sick - then you have the flu. Otherwise you have a cold.".
Was super sick once. Was informed that a child was pouring chocolate milk on my laptop. I couldn’t have cared less at that point.
I am making some assumptions here, but I would venture to guess a lot of these people just fake it and grind through it just to stay employed.
The solution are obvious, do not test people with asymptomatic/mild symptoms. A lot of people are forced to stay at home simply because positive test, even though they are not sick or already recovered from sick.
Sure, some may say they can still infect other but the chance a low and even if they infected other, doesn't mean that the other people become sick too.
Can we please stop using „exponential“ like this? Maybe you meant orders of magnitude?
It cost 10X less if we use 'Y' over 'Z'.
My brain always short circuits and says "I think they mean it costs 1/10th...."
"There was a 5 times decease in crime..." uggh, just give me the damn numbers. Is crime now at 1/20th the previous level???
I know they are telling us it's less, and I don't even care about the story; but i waste brain power trying to grok what they really mean.
Certainly there are more important things to fret about, like: "Tim went to the store with he and I.' Arrgghh!!!
I try to say "{x} is ten times {y}", which is, as far as I can tell is unambiguous. (Mostly, what's ten times colder?)
To me, "x times more than y" means the same as "x times as much as y" only "y×x" and "x times less than y" means "y÷x". I guess this might seem ambiguous if you bracket the expression like "x times (more than) y", but in practice it's bracketed like "x (times more than) y".
(Native American English speaker)
[edit]
I also wouldn't say that 6 is "75% less than 8" if your thought is that "more" just indicates a bigger value.
Languages change and are influenced by their use, so you need to pick your battles. If something can be unambiguously understood then you're going to be fighting an uphill battle and it's only a matter of time
An exponential change is a change on a log scale. Instead of current+d it’s exp[current+d]. So exponential change makes sense. “Exponentially higher” means on a log scale it’s higher enough to be worth commenting on. It’s mathematically correctly synonymous with an order(s) of magnitude change.
Of course, that gets you into the debate over what exponent or log base to use. Is 2x an order of magnitude increase? 1.1x? 10x? It’s all fuzzy.
And then there are people who just use it as “hella” and that still drives me nuts. “It increased by 10% but that matters so much to me that 10% is exponentially larger!” That kind of usage seems to be catching on too as “exponentially” further enters the lexicon of people who don’t remember what an exponent is. I’ll fight that one forever.
https://www.govexec.com/workforce/2020/12/usps-faces-busiest...
Keep in mind that this came on the heels of the Postmaster-initiated slowdown of most postal services in advance of U.S. elections in early November. DeJoy's staff eliminated overtime and made other changes which, along with the ongoing COVID crisis, led to sharp increases in delays in specific regions.
The situation in December was exacerbated by UPS and Fedex limiting parcels from commercial shippers, which added even more volume to the shipper of last resort ... the post office.
At one point the Post Office stopped scanning parcels (for us, in mid-December) and huge backlogs built up across the system. We heard from our USPS business rep in Boston that 200 workers were out sick at the processing facility in Nashua NH, leading to trucks arriving at the parking lot that couldn't be unloaded. They switched to processing Priority Mail at the facility in South Boston and everything else in Stamford CT, but they weren't able to work through the Nashua backlog until January. one Priority Mail parcel we shipped on Nov 30 that was supposed to be "3-day delivery" arrived at its destination in Kentucky 45 days later, on Jan. 13.
Thanks for shedding some light on what was going on and what the USPS was doing to adapt!
>U.S. consumers dramatically increase spending on goods as their ability to spend on services was constrained [by COVID] and that their lost income from unemployment would be counterbalanced by stimulus.
https://www.freightwaves.com/news/data-reveals-unprecedented...
Did you end up doing so?
China is now forecasted to outpace US economy by 2028, 5 years earlier than previous forecasts, due to changes this past year.
There is no such thing as independent western media.
Western media censors by omission. And when they report on China, they only report on news that casts China negatively, in order to make the western world appear morally superior.
If you would put the same trust in economic stats reported by China vs Western gov’ts...well.
Their neighbors (taiwan, japan, korea) were lifted out of poverty even sooner, so I'm not sure whether this is indicative of anything. Your whole analogy reminds me of the how in a bull market it's pretty easy for any trader to make money, even though they might perform worse than an index fund or a monkey and a dartboard.
“In other predictions the post brexit UK economy will grow at %4/year”
In my uneducated opinion, theres lots of factors. However, economy/wealth is by and far the largest one, because almost everything else seems to have a price tag.
China has 4x the population the US does. The US won the cold war because it had a larger economy, partly because it had a larger population. That's not how any future conflict is going to shake out
In total size. China's GDP per person won't reach the US until 2060, at the earliest.
I'm sure some people financially unaffected by the pandemic are using their stimulus for gadgets, but most recipients are using stimulus money for bills, savings and essentials.[1][2][3]
As perspective, only 39% of Americans could pay for an unexpected $1,000 expense.
[1] https://www.nber.org/system/files/working_papers/w27693/w276... [2] https://www.forbes.com/advisor/personal-finance/survey-one-t... [3] https://www.forbes.com/advisor/personal-finance/heres-how-am...
Person #1 is an adjunct instructor in the midwest, and is struggling with the low # of courses and the # high of students in each course, in addition to the additional workload that comes from doing everything online. Their income level is not as high in 2020 as before. They are an artist, and so try to take time (and buy materials) for their art, as they need some form of release.
Person #2 lives on the west coast (not a good part of the west coast), works in retail, doesn't have a car (in an area that requires one), and isn't in the best living situation. They have a full-time job they're doing well in, but it's not a high wage (it's below $15/hour, though more when they gets bonuses), so it's difficult to save up. They're smart, but it's difficult to maintain 150% motivation every. single. minute. of. the. day.
Person #3 lives in the midwest and is unemployed. After being furloughed, they left the food service job they were in: they were transferred to a remote location, likely because they were asking about why health insurance hadn't been resumed. The next job they found was a job selling insurance to businesses, a job that only pays when you make a "sale". Until then, your wages are zero. And it's a workplace that doesn't wear masks. A license to sell insurance is required, but the workplace (who is supposed to facilitate that) didn't lead them through the correct paperwork, so their ability to lean (and to sell) is limited. They are actively looking for a new job, ideally something that matches their degree.
There are three examples of the latter, just from me.
You could just as easily disparage paying rent by saying "it's great news for my landlord". Personally, I think Chinese industrialists and workers do more to earn the money.
The stimulating effect comes from spending it, no? I'm not worried about what my neighbors are spending the money on. We citizens and dollar-savers pay the bill through taxation/inflation, in a progressive manner. I don't see a moral hazard.
https://www.politifact.com/factchecks/2016/mar/14/donald-tru...
If you look at it closely, display panels are mostly manufactured in Asia. And a Chinese company (BOE) is the leader in the market:
https://www.statista.com/statistics/1124858/global-display-p....
But if it was sold in a US store, from a US wholesaler, transported across the US, designed by US engineers, etc, it still seems like it would stimulate the economy.
I was under the impression not much is truly manufactured here in the US any more. What are you going to buy, thousands of dollars worth of My Pillows?
I'm no economist, but my understanding is that paying down debt (universally considered a responsible use of money, as opposed to TV purchasing) is actually one of the least stimulating ways to spend money. You're effectively just hoping that the lender is going to spend the money on something stimulating instead of yourself.
From accounting the whole value of the widget, and not just added value from manufacturing processes if inputs are imported, effectively, already pre-assembled (this is how I believe all "Made in USA" TVs are made.)
Factoring in obscene IP value as a "material" component along with some bs called "goodwill."
The "realisation" of revenue across borders, and so on, and on, and on.
Rotterdam-Shanghai, I have no idea, timeline doesn’t fit with COVID. This article suggests collusion between shipping companies, and some train engineers testing positive de-stabilizing rail cargo:
https://theloadstar.com/box-shortages-congestion-and-high-ra...
There's a lack of empty containers in China, there's a lack of ships/capacity as the traffic has spiked while companies have put shipping routes on hold for a while last year, there's Brexit which delays things as lots of ships which usually go to Europe also stop in the UK, there's Chinese New Year approaching and everyone is trying to get their orders in before China effectively closes for a while (even though that might be different this year), there has also been overcapacity in the shipping industry for years and companies have worked to consolidate and reduce that which kinda seems to have worked but now comes at a bad time for everyone who wants to ship but obviously good for the shipping industry and all of this on top of a much swifter recovery than expected....
There are probably more reasons still.
At least here in Europe more stuff is transported by train from China now but they're expensive as well and only account for a tiny amount of the totals.
Unfortunately behind a paywall I believe https://www.economist.com/business/2020/10/10/how-covid-19-p...
And we have to remember that container rates have been quite low for quite a while. So any "excuse" to increase rates is welcome. What I saw since last year is, that carriers and shipping lines are offering much shorter demurrage free periods than, say, two years ago. There was a time two weeks without demurrage fees, now that is a day or so. Containers turned into a rare commodity it seems.
Some color in this article from Barron's: https://www.barrons.com/articles/shipping-rates-are-soaring-...
No, this is a perfect setup for inflation.
There's a risk of (temporary) inflation when the economy opens back up. There is major pent-up demand for travel, but nobody will build more airports, or buy more airplanes, because it's clearly temporary. So expect some crazy prices then.
Sounds like this isn't going to improve until we can vaccinate more people, especially essential workers (and I would include these dock workers in that).
Lots of cheap bulk components are sent by sea, but not obligated to like some hazmat.
But stuff stuck at sea is stuck at sea.
... I wish I hadn't
This phenomenon is because larger ships are more efficient, and ocean shipping is a super competitive, low-margin business (during normal times) like the airline industry, so in order to eek out a tiny profit, ocean lines consolidate and build bigger and bigger ships, which further drops prices. These ships can only actually go to a handful of megaports around the world, though.
Another factor is the infrastructure that exists at the ports - you need to do something with the cargo once it gets on shore. LA/Long Beach has invested in big, efficient terminals for trucks and trains to get loaded quickly and move cargo out of the port in big volumes.
Source: I used to work at Flexport on ocean shipping, so I have a general understanding of the industry
This infrastructure would only be valuable or even necessary for perhaps 2-3 months every 5 years.
Who would ever finance that?
also moving cargo between two ships floating around at sea is dangerous and difficult, giant ships are not meant to hold position parallel to each other in the open ocean (or indeed closely parallel to anything) without the assist of many tugs.
a "geared" (with crane) container ship looks like this, and even so it would be a very risky move to use the crane to do anything other than load a container to/from a wharf while the ship was firmly moored to it.
https://www.google.com/search?q=geared+container+ship&client...
It's relatively dangerous, both ships have to be designed for it, and both crews have to be trained for it.
I participated in many such refueling and replenishing operations while I was in the US Navy.
https://www.google.com/search?tbm=isch&q=resupply%20at%20sea...
This proved not to be able to compete with container ships when they were introduced. The last LASH ships in regular commercial service AFAIK were the Baco-Liners, which served small ports in West Africa and were scrapped in the early 2010s.
The really interesting changes will be in the ports on the US Eastern seaboard which planned to take advantage of the super-panamax cargo ships dimensioned for the new channel at Panama.