Where are all the containers? The global shortage explained
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If I'm reading this right, container shipping is an oligopoly similar to OPEC and they all banded together to reduce supply enough to raise prices, while in a competitive environment prices would have gone down due to reduced demand?
Since around 2008 it has been very difficult for ocean carriers of all types (not just containers) to turn a profit and so they all embarked on different strategies to try to become more efficient and manage costs. Before the Alliances, large ocean carriers needed to have an active and full network worldwide to attract customers. It's kind of like the transit problem: you don't get customers until you have a large network, but you can't afford a large network until you have a lot of customers. So many carriers operated routes that were loss leaders hoping to profit significantly off their mainline trades (you see the same in air travel).
The Alliances were one strategy to try to help these businesses become more efficient while still offering customers door-to-door shipping services, so in THE Alliance, there are a number of carriers each with different primary focuses, which means that they can operate much more efficient routes and take cargo wherever it needs to go.
The price of shipping a container is highly commoditized, there's intense competition in the market, and the margins are razor-thin, so I'm fairly confident that price-fixing isn't a significant factor in this industry. As well, as a shipper, the lions share of your costs getting a container from A to B are not the ocean transportation but everything else. Container storage at the port. Transport to the port. Loading and discharging costs. A multitude of fees that easily double or triple the raw container shipment number. Carriers have invested a lot in this space over the past years to verticalise and able to offer more of these services to their customers, instead of just being a pure ocean carrier. That (freight forwarding) is where the real margins are, and customers appreciate it because they get one simple upfront price, vendor management is easy, etc.
I don’t know for sure, but I have been in businesses where you can’t just spin up and spin down at a moments notice if spot prices start bouncing up and down.
Businesses operate "lean", and if they need more money to weather the rainy days, they can issue bonds, or ask the shareholders to inject more capital.
And to make mattes even "leaner" basically market forces pushed risk management out to "specialists" too. Underwriting, counterparty risk, credit risk, traditional insurance, "default insurance" are all just financial products now, that can be built into standard language of shipping contracts.
I recall an article a few years back saying Apple is the largest hedge fund in the world, run buy a small office in Reno NV - and they had a gigantic cash reserve sitting in the bank:
So it doesn't matter if Apple has a trillion dollar in the bank just sitting. The central bank will conduct open market operations to lower the rates of credit so people/companies are incentivized to start new ventures, finally invest in upgrading their old shit, buy a house with a lower APR, etc. And similarly when Apple starts "dumping money into the economy" the Fed will promptly raise rates to keep inflation in check.
Technically for those particular shell companies, yes likely.
For the general offshore companies (like Apple's), a very big yes.
This is a very accessible and detailed paper about how FDI (foreign direct investment) through offshore companies work, and how the high-tax-regime countries benefit the most (eg. the US): https://repository.law.umich.edu/cgi/viewcontent.cgi?article...
They closed that office and now I cant find that article.
https://www.law.cornell.edu/uscode/text/26/532
The tax code is set up with the assumption that corporations are pass-throughs -- they either re-invest funds or pay them out. Funds paid out are taxed as capital income by the recipient (often called "double taxation"). Corporations that sock away cash for a rainy day are viewed as evading this double taxation and are penalized rather harshly. This is another reason (but not the primary reason) why if you want to keep cash for a rainy day you need to have it overseas somewhere where the IRS can't penalize you for holding it.
Or course if that pile gets too big this won't fly.
One with a diversity of participants, informally colliding?
Or one with a few participants (because everyone else went out of business), informally colluding?
Ensuring profitable rates doesn't seem like a terrible use of collusion.
The EVERGREEN issue is interesting - They announced today that it could take weeks to free the evergreen - forcing all other vessels around the cape - adding at least 12-days to deliveries..
I would love to see a list of the traffic stuck behind the evergreen. It will be interesting to see what impact it will have on the EU economy.
This is a typo right? It should be 20%?
Surely no system could reach 0%. Some areas are bound to be net exporters of stuff, and others net importers.
I have no idea what percent is needed to cover repositioning, but 20% sounds decent. Especially for a dynamic demand system (little ability to micro forecast flows).
Actually, I wonder how the economy has adapted now that China has stopped "importing".
>The scrapping of containers now exceeds the building of new ones, causing inventories in factories to plummet. It will take months before more vessels and containers are built, meaning capacity likely won’t normalize until Q2 2021.
Interesting, try to buy one and they are charging and arm and leg. About 10-15 years ago you could pick up an old 40 FT container for about $500. Today you could go to a yard that has 10000 stacked and rusting containers and they want $2k plus to buy a beat up one.
Here is a 20 Ft beat to shit for $3600
https://northerncontainersales.ca/shipping-container-prices/...
Whats worse is diffusion of responsibility - someone could be on the critical path to essential suppliers for millions of people, but at the same time have no obligations to ensure their job is done, and perhaps not enough profit margin to plan for the shit time.
All it took was a sneeze and the whole thing falls apart.
I find it silly to claim this or that should have been stockpiled with hindsight. There are just too many different things to stockpile. And the same people demanding that are probably the ones taking to the street protesting against wasteful living.
It always surprises friends of mine to see that the bottom shelf of my pantry contains a lot of shelf stable meals that only slowly get cycled through. They never understood why I'd bother keeping at least several days worth of food around, "just in case".
Things today really aren't that crazy compared to what they could be like. Things will probably trend more towards normalcy in the next few months. But I know if things go bad, my immediate friends and family will be a bit more comfortable for a while longer than many of those around me.
A few people laughed at me for suggesting things could get really ugly. Others took the advise and acted on some of it. The first group had to endure long lines and very unpleasant conditions at local markets to get even the basics. The second group did OK.
One of the things that was also not helping is that idiot politicians were going on TV to tell everyone everything was fine and were, quite literally, laughing at the Trump administration and calling them racist (and more) for travel bans, etc.
The most horrific example of this was New York. Politicians in NY, from the Governor to the Mayor as well as health officials were telling everyone that this was nothing and that they should continue using the subway, going to restaurants, gathering, etc. They, quite literally, were responsible for tens of thousands, if not hundreds of thousands of deaths (people from NY panicked when things got bad and exploded out of the state, taking the virus with them everywhere). You don't have to believe me, here they are in their own words (yes, I kept links because I though this would be important to remember):
Some of these videos disappeared from YouTube, I had to find them again.
https://www.youtube.com/watch?v=cdKLx5MhTpk
https://www.youtube.com/watch?v=fcprNxC1fU0
https://www.youtube.com/watch?v=UbPPGrZH3VY
https://www.youtube.com/watch?v=CmllqkU6j2k
Some of the highlights on this next one (note all the lies and misinformation):
• Just like the normal flu • We should relax • We don't think it's going to be as bad as it is in other places • We have been ahead of this from day one • Go about your lives • Go about your business • There has to be prolonged exposure • Just wash your hands • No need to do anything special • We want New Yorkers to go about their daily lives • Ride the subway, ride the bus, go see your neighbors • We have the equipment • It's not like we are dealing with something we haven't dealt with before • We have the ability to address this • We have the capacity to keep this contained • Like the normal flu
https://www.youtube.com/watch?v=NEhLOp7UGNM
Here's another gem from Dr. Oxiris Barbot, NY Health Commissioner (once again, deadly lies):
• The local risk is low • Our preparedness is high • Go about your lives • No indication to be using masks • We have measures • We have screening • No indication that going through the subway is a risk factor • No indications to be using masks • False sense of security • The risk is low
https://www.youtube.com/watch?v=rMkBW9ewPz8
Of course, the mainstream media went with these stories, smugly laughing at the Trump administration and gladly characterizing their actions as racially motivated.
For context, the travel ban from China was put into place on January 31, 2020. Had these politicians and the media taken this event seriously it is likely hundreds of thousands of lives could have been saved.
When I heard that I ignored what media and politicians were saying (all is well, not to worry, just like the flu) did my research and got ready early February. My hypothesis was very simple: Such action (the travel ban) would not be taken unless they learned of something very serious potentially coming to our shores. It was, pick a number, five standard deviations away from the mean in international politics. That caught my attention.
We need to be honest about this. These politicians and officials were likely responsible for seeding the country with the virus and killing hundreds of thousands of people. Yet most people are uncomfortable with an honest evaluation of history, being biased is easier.
The NYT has gone down this path far further than I would have thought possible. The WSJ is now owned by Murdoch so its less surprising that their news reporting has also slipped. Those are the two best. By a margin.
There's a massive problem that isn't being talked about because "Them! They're evil! Just look at what they say about..."
edit: I did something similar stocking up based on the Guardian (yeah, not an ideal source) reporting that a woman from Wuhan crossed the country with no symptoms for Chinese New Year and gave the virus to her whole family. She never had symptoms. I thought at that point, this is on, there's a non-negligible chance this will not be contained, so get prepared.
And, yes, we have to be fair and clearly state that Trump was a complete moron in the way he handled some aspects of this. As an example, I cannot understand why he had such a problem with masks.
I can't even imagine the reasons other than to look at it from my background in manufacturing. This is what I think could have happened: The administration quickly understood we don't even make the cloth necessary to make masks. The US and Europe could not manufacture ANY of the safety equipment we needed for this pandemic at scale back in January of last year. We didn't even make the machines that make the masks.
Telling the public to go get masks would have resulted in a mess and panic. I get that possibility. Here's what they should have done: Figure out how people could DIY some level of protection and widely publish this. Trump should have gone on TV and told people the truth: We can't make enough masks. They are important. This is what you have to do while we sort this out. Instead he engaged in stupid battles with the media. That was dumb, unnecessary, and, yes, it likely cost lives too.
All that said, we are vaccinating at a rate of over a million people per day today because of what the Trump administration set in motion a year ago. They pushed for and succeeded at having multiple vaccines developed in the span of eight months. Something never before done in the history of humanity. And yet he/they were vilified for the stupid shit he did in front of the cameras and, to some extent, rightly so in my opinion.
This was a year in which both our politicians and our news media failed us in monumental ways. Both of these groups lied to us. And the consequences were deadly. I hope historians get this one right.
Say what now? If i'm not mistaken, none of the first vaccines ( Sputnik V, Chinese one, Pfizer/Biontech, AstraZeneca/Oxford) have anything to do with the US. Moderna and J&J are the only ones developed with US funding. So saying that the plethora of vaccines we got was due to the Trump administration is... wrong. Any even remotely sane administration ( which i know isn't a given for the Trump one) would have financed vaccine development, and many did ( UK with Oxford, France with Sanofi and Institut Pasteur ( both failures, Russia with theirs, etc. etc.)
Also not including Moderna in your list of first vaccines is pretty self-serving considering it was approved (fine, EUA'd) one week after Pfizer.
Even the claim that Pfizer wasn't funded by the US is disingenuous; the US placed an order for 100 million doses of it in July for almost $2 billion.
https://www.pfizer.com/news/press-release/press-release-deta...
Indeed, it's not their fault, but it's also wrong to say they have anything to do with it.
> Also not including Moderna in your list of first vaccines is pretty self-serving considering it was approved (fine, EUA'd) one week after Pfizer.
Indeed i fucked up, i wanted to say none of the initial ones bar Moderna, and then say only Moderna and the J&J one were funded by the US, but changed the structure to avoid repetition and it came out wrong.
> Even the claim that Pfizer wasn't funded by the US is disingenuous; the US placed an order for 100 million doses of it in July for almost $2 billion.
Ordering something with payment on delivery doesn't fund its development:
quote from the press release:
> The U.S. government will pay the companies $1.95 billion upon the receipt of the first 100 million doses, following FDA authorization or approval. The U.S. government also can acquire up to an additional 500 million doses.
Two scenarios:
First: "Please develop a vaccine for us. Go quickly. Invest massive amounts of money and resources. We might buy some from you. If someone else comes up with it first, we'll buy from them."
Second: "Here's an irrevocable order for two billion US dollars for a product we need you to develop immediately. Go! Go! Go!".
No business with risk it all under the first scenario. It would be suicidal.
The second scenario. One where you are given guaranteed payment for a result as well as everything else that goes with it (lowering regulatory barriers, fast-track FDA action, help in mass manufacturing and organizing mass distribution, etc.). Yeah, the second scenario is vastly different.
Put it in terms of a startup. Imagine going to a VC and saying "I have this idea but no clue if anyone will buy it", vs. "I have this idea and I have this irrevocable US government order for two billion dollars of my product and all the support I need to make it happen quickly". Which one of the two do you think will get funded in a microsecond?
Yeah. That's the difference.
In any case, the question at hand was whether or not the US admin funded Pfizer, and it did not. It gave them assurances, but so did many other entities ( like the EU), so the US really cannot be hailed as some sort of visionaries that made the vaccines possible with their generous help ( which was what GP was claiming).
Without that pre-order, they had no guarantee that they would get any money. What if their vaccine turned out to be 50% effective? 30%?
You said that the administration should have funded vaccine development. They offered funding and were declined. They also funded J&J and Moderna, and provided purchase guarantees for Pfizer when they weren't allowed to fund it. In other words, the plethora of vaccines that we have is in part thanks to the actions of the administration.
What, specifically, are you suggesting they should have done that they didn't with regard to funding?
Edit: there are innumerable things we can point to that the Trump administration did wrong during the pandemic that made things worse. We don't need to invent new ones that are easily disproved.
You might want to look at some of the late 18th century pamphlets and newspapers that were the "press" of which the American founders aimed to protect the freedom -- the American revolutionaries' cause spread partly through pamphlets, so they were very sympathetic to the medium. These publications were not only extremely partisan, but they often abounded in personal insults and rage far beyond anything one would see in a modern newspaper. No, the Founders were very comfortable with sensationalism and extreme polemic.
I agree with your take that the impact on America could have been much smaller in all sorts of scenarios, including just taking it more seriously sooner (like during the time frame that you're recounting).
I'm not sure that the travel ban from China in particular would have significantly affected the course of the pandemic in the U.S. We now know that COVID is very often totally asymptomatic and that it had already spread to many countries (possibly including the U.S.) by January of last year. People arriving from countries other than China could easily have introduced it into the U.S., and very possibly did (and certainly have many times since then). The U.S. didn't have the testing or tracing or quarantine capabilities to control the transmission of the epidemic in the community.
This skepticism is not meant to take away from your other points, which all seem right to me. I think many other kinds of responses (or awareness or understanding on the part of the American public) could have had a big effect last January or February. The responses, awareness, and understanding we actually got were terrible.
At this time they were trying to eject him from office on the most ridiculous of basis. Nearly all of the media and all of government was focused on damaging him. Because of this they could not bring themselves to line up behind him and follow his lead.
Think about that for a moment. Love or hate Trump, in that moment, early next year, the right move for the nation --not for politicians and the media-- would have been to say: "Mr. President, what do you want us to do. We are 100% with you."
The media, in particular, could have been far more useful to the nation and the world. Instead of focusing on their usual nonsense and web of lies they could have engaged in real journalism and delivered actionable information.
Instead of NY and San Francisco politicians saying things like "everything is OK, it's just the flu, go to festivals, get in the subway, etc." they should have contacted the White house for actionable intelligence on why they were sounding the alarm as they did.
Remember that at the same time Dr. Fauci and Dr. Birx where on TV telling us a tsunami was coming, New York officials (and our current President and VP) were saying this was racist, xenophobic and nothing to worry about.
Like I said, I hope historians paint the entire picture and do so with the truth.
The Trump administration IS the US government; he staffed the CDC, he controlled the messaging, he denied repeatedly that COVID was serious. It's not his public manner or communication skills that did the damage, it's his outright lying and deception that he and his administration did on a daily basis. Just because he was right about imposing a travel ban doesn't make up for the complete failure of his administration.
I was trying to be kind and not say all of the Democratic party and all of the left media. Which is the truth.
How could it be a failure if millions of people per day are being vaccinated today because of what his administration did while the entire Democratic party and news media were focusing on trying to destroy the man, his family and his business. C'mon.
Biden is trying to take credit for this. He didn't do shit. Manufacturing and distributing a complex at this scale isn't something you turn on in a week or two months. It takes a VERY long time. Having done it in almost exactly a year is an absolutely incredible accomplishment and the only one who can take credit for it is Trump. We can be critical of what he did wrong --and there's a long list-- but we also have to be honest and truthful about everything else.
Aside from that, I always say that nothing in life is reduced to a single variable. People like to reduce causality to a single variable because it's convenient and far simpler to think about. Life is a complex multivariate problem and what we are talking about isn't an exception.
Everyone in our government performed poorly during this crisis.
Democrats chose to wage war during a pandemic rather than get things done.
The media helped them.
Trump was an absolute idiot in public and truly inspired projectile vomiting almost every time he spoke.
Prior administrations --going back decades-- compromised our ability to respond to such emergencies through a range of actions, again, dating back decades.
And, of course, there's the American people, who seem to love to stop thinking critically, take sides, refuse to recognize when the common good is more important than our own little selfish impulses, etc.
I could not possibly list the variables that went into getting us to where we are today. Nobody could. It would, however, be nice if we could stop the nonsense for long enough for an honest root cause analysis and attempt to take action to not ever do this again.
Here's something that's very clear to me: If we continue to behave this way we are ensuring China's supremacy in the world order for one hundred to two hundred years. And they know it. More power to them, they are kicking our ass and executing flawlessly. I don't agree with their politics, but you have to be in awe of what they've been able to accomplish in about fifty years. That takes focus, unity and dedication we do not have and will likely never regain until everyone is wondering why a bag of rice is $100 and we have 25% unemployment.
That's what you wrote. I'm not distorting anything. You seem to want to limit Trump's responsibility to his communication skills. He owned COVID, it was his administration, his Cabinet, the GOP controlled Senate, his CDC where he installed a leader that had huge question marks even before the pandemic. It was assigning his son in-law to the COVID task force. It was his touting quack solutions because he lacked the critical thinking to actually listen to medical professionals.
"Prior administrations" had issued warnings about the potential for this type of pandemic. Warnings that were ignored. (Echoes of 9/11).
You can claim I'm distorting your message, but your message is incoherent and ignoring the facts.
For this and other reasons, I am a strong supporter or term limits. Politicians who stay in office for decades lead to dysfunction and rot.
They should do well to remember people aren't goldfish and have memories beyond three seconds.
If nothing else, this has showed movies to be far removed fron reality. I imagine in hollywood, the US government takes something like a virus of questionable origin quite seriously. Not just because it can kill you but because it might mutate and a deadly strain might surface and do the real damage.
The real response was hard to fathom for most of the world. How can the most powerful nation on earth struggle so badly? More so since we live in the digitally connected age where data is plenty. Does this mean if we had an alien invasion they'd dysfunction as bad as they did? Its outrageous really.
Being prepped and having the financial muscle to buy supplies for months in advance is well and good but most people arent in such good financial terms. Therefore prepping is a function of time and money where money is the determining factor.
Not a lot of people have a lot of money. As much as they'd like to get into the practice anti-fragility, the economics disagrees with them
The virus uncovered political dysfunction in ways nothing else could have achieved.
It also showed the world the state of decimation of the industrial bases of the US, Europe and nearly every nation on the planet. The fact that the US and Europe could not make masks and protective equipment because we don't even make the cloth or the machinery required to manufacture these things at scale was a shocking revelation for anyone not in manufacturing.
I think this is one of the reasons for which I reacted so quickly. Aside from having the means, I have been manufacturing things for three decades and have see exactly how badly our supply chain and capabilities have eroded. I want to say that I instinctively knew that a pandemic would likely cause massive shortages due to our lack of mass manufacturing capacity. It also helps that I spent a good deal of my life in Latin America. I remember my parents buying huge sacks of flour, sugar and other things as the economy faltered around them.
Problem is, that's not true!
While it certainly was xenophobic in Trump’s hands, it was practically a decision that made him happy as a China hater, the motivation of the decision is independent of its utility.
Trump certainly made a mess of it after that.
All of the politicians got fooled by the relative stability and rareness of the pandemic. Most of the time telling people not to panic it won’t be as bad as you fear works OK as a strategy in a country like the US.
That said, on the point about Trump and his relationship with China. I simply don't see it as xenophobic. And, BTW, I have never supported Trump or vote for him. I am a strongly independent classical liberal, with the caveat that I actively seek the truth and will never align myself with any political party by default because that implies they are 100% correct 100% of the time, which is impossible.
And, BTW #2, I don't hate China at all. While I disagree with their social and political stances, on the business front, the job they have done during the last 50 years is nothing less than outstanding. I have experience manufacturing in China and can tell you from that first hand experience that the US almost has no hope of regaining most of the industrial base it lost. While we focus on growing a society with a victim-mentality and growing division they have been growing what might already be the most entrepreneurial society in history. It's hard to describe the difference other than: If you want to get shit done, you go to China, not the US, not Europe. Sorry.
Trump has been talking about China for decades. He has been watching the erosion of our industrial base for a long time. And he rightly points at Chinese practices and the idiocy of our own politicians as some (not all) of the root causes. The popular "corporate greed" cause is nonsense. Go try and manufacture almost anything at scale in the US or Europe and see how far you get. There's no greed involved, we can't even make N95 masks at scale.
The problem with the Trump/China relationship, in my opinion, has many facets.
One of them is that he turned out to be perhaps the worst communicator who has ever inhabited the White House. I mean, his lack of ability to deliver well constructed messages in front of a camera was just unbelievable. In politics and leadership you have to be able to communicate. Every single one of his press briefings and speeches was an absolute train wreck.
The second issue had to do with the all-out warfare the entire Left and the media engaged in for four years. You can't run a country when at least half of your government is engaged in a war against the other half. It's impossible. I don't care who you are.
A simple example of this is Trump's attempt to rescind the postal treaty, dating back to 1874 (yes!) that made it so the US taxpayers subsidize nearly every Chinese package travelling within the US. In other words, once certain class of packages lands on US soil delivery of Chinese goods within the US is FREE. The intention behind this treaty was good. It was meant to help developing nations have access to our markets. Well, it isn't 1874 and China is the second largest economy in the world.
What that treaty means is that, as a US-based business, it costs me more to ship a package to New York than it costs a Chinese competitor. Even if my product cost exactly the same to manufacture, I lose.
That treaty should have been rescinded decades ago. Trump was the only US President (or politician) to speak about this and point out just how badly we were getting screwed and how much damage we are causing our own businesses. And for that his attempt to rescind this ridiculous treaty was labelled as xenophobic and racially motivated. Again, the entire Democratic party and the media were at war with him and could not care less about the absolute fact that this treaty has been damaging our nation for decades. In their ideologically twisted world they could not bring themselves into alignment with him at all, even if that meant damaging every single business in the US.
How do we fix this? Don't know. Other than, perhaps, strong term limits. On the media side, we do not benefit at all from having 95% of the media in political alignment with an ideological side. Imagine if 95% of our media were aligned with the right. That would be horrible. Well, it isn't any different when the tables are turned. This isn't good for anyone.
I don't know why you're signaling out NY politicians, who, as stupid as they were with the initial handling, at least changed course when they understood - many others across the US refused to do so well in the pandemic, when it was painfully obvious how contagious and deadly the virus is.
I'm sorry, the conclusion that the travel ban was racially motivated is just laughable.
I am singling out NY politicians because they likely seeded the entire nation with this virus at a massive scale when they took political sides rather than come into alignment with what the Trump administration was saying.
You can literally search for and find videos from exactly the same dates going back to January, February and March to confirm this. The Trump Administration was sounding the alarm. Every time Trump or the team would go on TV politicians from New York, Pelosi and Schummer and others would get in front of a camera to oppose it and tell the public everything was fine.
I focus on NY officials because they are likely responsible for hundreds of thousands of deaths across the nation. Someone would have to trace the path the virus took in the US. Based on the timeline I would not be surprised if almost every single outburst traces to New York and San Francisco, but mostly NY. That's certainly the case for adjoining states and, I believe, Florida.
WHO were slow in some regards ( e.g. masks, but it's not like it would have made any positive difference when there simply weren't enough masks available even for medical personnel, let alone the general public), and it's their job to fight pandemics, but they're not "responsible for hundreds of thousands of deaths". It's a novel virus, vastly more contagious ( even when asymptomatic), and especially due to China's initial botched response information was slow to tricke, and even when the WHO said stuff, issued warnings, gave counsel many countries outright ignored them, with some like the US deciding to withhold funding to fuck with the WHO in the middle of a fucking pandemic instead of listening to them.
> You can literally search for and find videos from exactly the same dates going back to January, February and March to confirm this. The Trump Administration was sounding the alarm. Every time Trump or the team would go on TV politicians from New York, Pelosi and Schummer and others would get in front of a camera to oppose it and tell the public everything was fine.
Are you sure? https://www.youtube.com/watch?v=2eB_xCk5ABw, https://www.youtube.com/watch?v=IuVo4fnpLC8 and similar ( you might say those are biased sources, but they show actual footage of him talking nonsense with dates, so if they're wrong, it should be pretty easy to debunk), and my own memory, and everything i've ever seen on the subject was exactly the opposite - Trump desperately trying to sweep it under the rug and saying that everything is fine, everything is under control. He continued to do so well after NY was in pandemic response mode, with makeshift morgues(!) to handle all the dead. Do you recall Cuomo's big speech about how states are bidding against each other for PPE and ventilators, and Trump's and Kushner's response that the federal stockpile is theirs, and they don't buy it that states suddenly need more PPE and ventilators?
Trump, at least to me, revealed himself as being in a range between incompetent to a moron when it came to effective communication with the public. One of our (sadly) favorite daily events was "Let's see what stupid shit Trump is going to say today". This did not help. This was deadly.
this was made worse by a Democratic party and mass media that chose to be at war with him in the middle of a world-wide pandemic. They were literally trying to eject him from office. How could have have possibly been a good idea at all?
Instead of everyone aligning for the common good they divided further and further, to the detriment of all. I place that blame 100% on the hands of the Democratic party and 100% on the part of the leftist media who support them blindly. To behave this way in the middle of a pandemic was pure bullshit and people lost their lives because of it. Trump had no control over the war that was being waged against him. Democrats could have (and should have) chosen to stop with the nonsense and focus on what actually mattered. They wasted our time and resources with impeachment right as this thing was exploding. Love or hate Trump, the truth of the matter is that when you have missiles coming down on your cities your fucking unite, no matter what, or we all die.
The foundational issues exposed by this pandemic were many. At the core, I think, is the reality that the US system of government isn't centralized. The most significant impact of this is that the US President (regardless of who it might be) or the Federal Government cannot, by law tell the states what to do. In other words, the US President cannot mandate mask usage, or staying at home, etc. The United States of America is more like a bunch of divided countries, each agreeing to some common frameworks and each telling the other states and the federal government "fuck you, you can't tell me what to do". The pandemic brought that to the forefront full force. Again, to our detriment.
Vaccine distribution is another issue. The federal government cannot mandate how to distribute the vaccine. They can recommend and setup systems, but the states have full autonomy on this front and can't be forced into anything at all.
Yes, amendments can be passed, but they require 2/3 of the House, Senate and State Legislatures to agree. This is difficult during normal times. Given the political war these bodies were fighting at the time, this was impossible.
The structural problems with the US Constitution continue with such issues as an imperfect freedom of the press right that allows the press to lie at will and become political activists in a fight. If you don't agree with this, just imagine a scenario where 95% of the press is 100% aligned with the Right to get a sense of what this nightmare scenario looks like to anyone interested in the truth and balance. We should not allow that to every happen in this country, yet it is exactly what we have today, with the left in full control of a vast portion of the media. Not sure how we fix it. We have to find a way.
This is no different from the right to firearms. We need to fix this shit (speech and firearms), it's crazy.
We also need to purge political ranks with solid term limits. The level of ignorance in Congress is staggering. This is an environment where people who would not make it in the private domain can become millionaires and have decades-long careers by simply pandering for votes. It's sick and we are all paying for the consequences of this travesty. The only system that has proven to deliver results in the private domain ought to somehow be adapted to government: Meritocracy, performance, results, delivering on promises, etc.
We have a political system where, every election, politicians tell us how they are going to fix healthcare, education, gun laws, unemployment, immigration and inequality. They have been saying these things for, I don't know, at least fifty years. Republican, Democrat, it doesn't matter. They are all a bunch of pandering incompetent imbeciles who have somehow managed to stay in power while driving this nation backwards. We need term limits and we need a merit-based system that rewards actual performance, not lies and manipulation.
The pandemic was the perfect storm that exposed just how fucked we are. If people don't wake up and fix this by voting intelligently and applying political pressure nothing will change and it will only get better. I mean, look at where we are now. This is hardly evidence of long term competence.
I agree with a fair bit of what you are saying here but their behaviour in most cases does not comport with the definition of "lie".
When the President of the United States goes on TV to effectively say: "Danger! Danger! We are Shutting down travel from China". Well, politicians ought to stop, think, call the White House, understand why such a drastic move was made and then fall in line and support the effort rather than fight it.
There is no doubt at all that telling people in NY to continue using the subways, go to festivals, etc. caused the virus to spread exponentially.
NY officials were on TV saying things like "we are ready for this", "we are prepared", "this is just like the flu", "we know how to treat this", etc. None of those things are true. They pulled that stuff out of their collective asses. The Trump administration went five standard deviations in the direction of caution and while the entire Democratic party (in particular NY) and the news media went five standard deviations in the direction of ignorant bullshit.
Look, it's clear that Trump made a mess of his public handling of this event which, rightly so, cost him the election. In public, he was a mess. Being under constant attack from his opponents and having to deal with a rabid media out for blood every second of every day sure didn't help.
Behind the scenes, it's hard to find anything they did wrong. In fact, the actual handling of this pandemic behind the scenes was an outstanding achievement and it should go down in history as such. That team gave us vaccines in eight months. They saved millions of lives around the world.
"Behind the scenes, it's hard to find anything they did wrong."
Off the top of my head: They botched the China travel ban, they delayed and then botched the European travel ban, bad initial CDC tests, poor-to-non-existant data collection, planning based on keeping the virus out instead of mitigation or suppression, bad internal modeling... I think you are being silly.
Let's be clear OWS vaccine development was amazing and good, but OxfordAZ was ready at the same time, China & Russian vaccines too.
But once it hit Italy bad, there were no more excuses.
At the time this was going on they were trying to impeach Trump. This means that the entire Democratic party and nearly the entire media could not bring themselves into alignment with him at all. They were trying to kill the guy. How could they turn around and say: "Yes, sir. What do you need us to do?".
And so the nation paid the price.
This virus showed the US and the world just how dysfunctional our system of government has become. It has also demonstrated how dangerously partisan and politically-driven our mass media turns out to be. All to the detriment of the nation and the world.
Imagine what we could have accomplished if they actually worked together.
I did some work for a strategic US stockpile and it’s not trivial in the least.
There have been no real serious shortfalls of goods in a once in a century pandemic and the cash would have served anyone well!
We had grain elevators and other stockpiles of essentials. A country would save grain from summer to feed it through winter, and have months spare. This does not result in some imaginary 'wastefull living'.
Obviously you don't stockpile coffee and selfie sticks
Of course every country has stockpiles of fuel and grains.
If you think any first world nation is entirely reliant on global trade for subsistence of its populace (yes, even UK) you’ve been playing far too much Civilization. Now if you want to talk about the impact of globalism on crop markets and by extension a small operator, you have something to discuss. But you’re not saying that.
It’s ludicrous to think that just because there is more global trade all governments have given up on their own interests and are just subject to the wills of “globalism”.
Agree. But how do we know they're full? ;-)
According to this hard-to-read map [1], Ireland, Italy, Spain and Portugal also seems to be below 1.
0: http://www.fao.org/3/i2493e/i2493e03.pdf 1: http://www.fao.org/3/i5222e/i5222e.pdf
National food reserves are usually used like this (as a price buffer rather than a something to support security).
For example read about the National Raisin Reserve here: https://www.mentalfloss.com/article/87144/15-strategic-reser...
Even with Covid we saw some of the hindsight comments. In the early days it was thought that ventilators were the bottleneck and they should have been stockpiled. But that seems to not have been an issue in the end. And if you were now to stockpile ventilators, perhaps the next pandemic would require something else.
http://www.msn.com/en-xl/northamerica/top-stories/the-world-...
We are already stockpiling ramen and water and now I guess we will start adding dog food into the mix as well.
Things have not fallen apart, but they have clearly changed.
edit: Chicago-land
Probably just the standard 'it's out of stock, so some random seller will throw it up there for 2-3x the price and hope someone buys it' that just about every product has on Amazon. I see it happen all the time with board games.
Like this card pack for the Arkham Horror Card game, that someone's trying to sell for $40, when it retails for $15: https://www.amazon.com/Arkham-Horror-TCG-Dagon-Mythos/dp/B08...
100% the fault of Amazon or whatever marketplace this is. Right now we should be having a rich taxonomy and unique product database that links all versions of the same product together so that I can click: "Chewy Dog Food 5kg" and get all the sellers offering it. Then proceed to sort by price, filter out the suppliers that look dodgy, add said suppliers to a "fake chinese product spam list" personal black list, and proceed to buy the cheapest original version of the product.
It may have been a glitch or we may have problems in the coming months.
My pup eats Wellness CORE Natural lamb
Still, it is just an anecdote.
I have the impression that the highest profit margins typically fall on non essentials
Wheat costs about $200/ton and peaked around $450/ton during the arab spring period. A ton of wheat (with a few supplements) is enough to for 500g/day for 5 people for a year if half your calories come from wheat. Even at $500/ton, that's about $100/yr/person for the wheat itself. Wholesale raw foods are quite cheap from the perspective of someone in a rich nation. Can be quite expensive for the very poor. The solution is to help people in poor nations industrialize so that they are less poor.
Given the challenge of finding an optimum it seems like the world hasn’t done too badly.
The last container shortage, which lasted quite a while, was in 2019. Because of paint used on containers. The old obe wasn't allowed anymore in the EU and, if memory serves well, the US. So whole fleets had to be repainted. In China, because it is cheaper. So once containers returned to Asia, they were removed from circulation for a while. We also had the Hanjin bankruptcy. This time is interesting, because COVID already screwed everything up in Q1 2020, these issues were still not really sorted out by now. European ports will be in for some funny times now, they will run try until the Suez is open again. And they will get swamped. It will be sorted out so, it might be worse than usual, but generally these things can also happen due to bad weather. This industry knows what to do. Still really interesting, I am kind of sad I missed the SCM operations on that.
It was poorly defined, in the sense that nearly every single economic activity was "Essential" under the definitions set out by governments across the world.
If you provided any kind of service or product that was consumed by an essential business, you were also essential. My wife works in a small company that sets up tech conferences. They are... Essential (Despite not having any work for the past year. If nobody wants to pay you to do any work, I don't think you are essential, but I'm not the guy in charge...)
Looking at the definition of "essential" most places in the West, it was nearly everyone!
Couldn’t, or wouldn’t.
If there is no way a reasonable person could make the item at that price point then you are living on borrowed time.
If your margins are that tight, any delay in a shipment will decrease your profit too much and risk the whole thing.
They don't need to know there's a current problem, only that any problem will collapse everything.
There are interesting parallels to unpaid volunteers maintaining open source projects.
But it didn’t fall apart. I’ve been able to get nearly everything I was getting before the pandemic. Prices of some stuff has increases and there are a few things that are harder to find, but the variety of goods available to me now is still way better than it was even just 20 years ago.
The system is stunningly resilient. Shortages of a few things doesn’t mean “the whole thing falls apart”. You’ll know if that happens because people will get really violent really fast when food or water stops.
I don't think this is true anymore.
" Let me tell you something about Hew-mons, Nephew. They're a wonderful, friendly people, as long as their bellies are full and their holosuites are working. But take away their creature comforts, deprive them of food, sleep, sonic showers, put their lives in jeopardy over an extended period of time and those same friendly, intelligent, wonderful people... will become as nasty and as violent as the most bloodthirsty Klingon. You don't believe me? Look at those faces. Look in their eyes. "
"You don't understand. Ferengi workers don't want to stop the exploitation. We want to find a way to become the exploiters"
There are even biological signs of this shift. Like dropping testosterone levels in men.
And how many people lived pretty sad lives being nothing more than serfs or farmers, without even the comfort of a distraction?
Enjoy a short brutal life with all that extra testosterone.
Barely. I mean... just look at what is going on in the Suez Canal, which is at the moment blocked by a mega freighter which had crashed into the walls and run aground: millions of dollars of damage and delays risking cascade effects in the harbors. Or how car factories all over the world are having issues because TSMC can't keep up with chip demands (and the car manufacturers having slashed orders during 'rona).
What makes it worse is that there are a number of conflicts that could escalate into open wars: the whole situation with China's aggressive imperialism (not just Taiwan), the powder keg Iran/Turkey/Syria/Israel, many countries in South America slowly or openly collapsing... at least some of these can drag the entire world's economy with them, one way or the other.
Essentially they have one more shot at a quick fix: todays high tide. And if that doesn't do the trick they will have to come up with another solution but those will likely be much slower to put into effect, 224,000 tons (!) is a lot of mass to try to move, especially when stuck.
Conflict was here long before globalisation, it has nothing to do with just in time delivery and smoothly running supply chain. Taiwan is a problem, because of chips. The world economy is stronger than some south american country. The "western world" is pretty much ok until someone decides to bomb us. Europe will switch from eating rice to more bread, and everybody is satiated. And the rest wasnt doing any better 50 years ago than is doing now. Except for obvious war zones, which pains me very much that in this age of abundance we have to deal with shitty psycho leaders and tribal mentality warriors.
The Suez is being progressively widened and doubled. Previous blockages have been due to war, this type of blocking I think is the first since 1869. The powder keg of Israel is hardly new (indeed that's often been the cause of previous Suez blocking), collapsing south american countries isnt new either - Pinnochet? Peron?
We haven’t even hit government mandated rations for things and that was a matter of course several times throughout the 1900s.
The Suez Canal is a cost and time optimizer. There is an alternate path around South Africa that all of these mega ships are more than capable doing. Transport costs for some stuff and delays will go up, but that’s it. That won’t even impact people in the US in any meaningful way.
Something did break the last year i guess, that wasnt normal anywhere
Just as a little example, all my remaining orders on Amazon are delayed by months and it is impossible to get any info except what the original projected delivery date was. One product ordered last October has not arrived yet. As a consequence I basically stopped any online orders except a few via ebay and am now just waiting for the backlog to be processed. The complete lack of communication from Amazon does not help, neither does Amazon's slow transformation into a dropshipping AliExpress reseller, causing delivery times to behave as predictably as quantum states.
For a few parts I just can't get in a shop I tried other platforms and that made a difference. They often have a hard time competing with shipping fees, but that is a tradeoff I'll gladly take.
It sounds like you're ordering items with long delivery times that indicate they're shipping direct from China, is that correct? I exclude any non-Prime items and haven't had any shipping issues in the past year aside from a day delay here or there.
A fire somewhere or a ship blocking one of the biggest shipping lanes for a few days or somebody getting trigger happy in a corner of the word.
This makes sense, but at a macro level it can't have too large an effect on shipping rates: at worst, you need to pay for a round trip to bring back the empty container, instead of a one way journey. A 100% increase, which is a lot in most contexts, but oil prices (the other main marginal cost in shipping) fluctuate by that much three years out of ten.
Container shipping is so cheap these days that I don't see this effect killing the margins of many businesses.
With a shortage, prices rise until supply meets demand. There is no "100% increase limit" on that effect.
That assumes the container is ready for you to bring back. It sounds like a big part of the problem is that North America is a bottleneck where it is taking containers in, but they aren't available to be sent back, empty or not.
Perhaps the freight industry has long term contract rates which assume bidirectional flow, and they can't operate economically without essentially doubling rates, so they constrain capacity.
https://www.maritime-executive.com/article/los-angeles-addre...
Part of my business is a logistics operation... post-Christmas we were hobbled, I lost 30-40% of manhours any given week and the customers on the other side were the same way. I had to cut throughput 50-60% and overcommit staff to do what I needed to do. Inventory on hand is 10x what it should be.
So I would guess that a lot of the container issue is inventory stuck in the channel. Even companies like Walmart are struggling to keep shelves stocked, and they have a world class, vertically integrated operation.
1. Food prices are rising fast, I am literally spending double per month now of what I spent 8 months ago.
2. The shipping shortage led to a severe deficit of materials, my shop sell stuff to auto manufacturers, and one of them told me they will have to shut down the whole factory because they can't get their hands on a passenger seat shipment, and already have their yard full of incomplete cars.
3. The deficit even affected politics: we had elections recently, I talked to one mayor candidate in person, and the candidate complained they couldn't make certain forms of campaigning, for example handing out flags, because the flag manufacturer was struggling to get a shipment of plastic to make the flag handles!
4. Some cities there been utter chaos as trucks with produce pile up waiting for containers, this week in particular people almost came to blows because trucks started to fill up a city, and the mayor banned crowds from the farmer market because COVID, leading to farmers to start to unload produce in the middle of the street and grind the whole city economy to a halt.
5. My shop been trying to stock products because we can't rely on imports, this has been extremely crazy, we get shipments at random dates, demand spikes on random dates too, we ran out of physical space, manufacturers been raising prices to us out of the blue (sometimes two months in a row)´, and another manufacturer seemly just gave up, whenever we call them, they say there is no trucks available so they won't bother even trying to manufacture whatever we ordered.
I don't think that's just the container crisis, your currency has been going down the shitter for some time now.
It's able to carry 24,000 of those large ISO containers.
If I am counting correctly, you can see about 209 +2423*9 = 5148 containers.
Still, I am unable to see how 12000 containers would fit the ship.
Edit: I am correct, as you can see in this picture:
https://en.wikipedia.org/wiki/Algeciras-class_container_ship...
TEUs (it should be cubic metres), inches (for screens we should use sqcm + aspect ratio), etc.
It depends on the guest how often towel last. Construction crew, or people with makeup, hair dyes stain easily. Local guest (People from the town) also stains more towels.
I probably used more towels during covid compare to previous 2 years.
If the ships aren't piling up in north america, how are the containers? Are ships leaving north america without picking up containers and if so why?
Ships are too valuable to wait around for the containers to catch up.
In fact, it is very like the incentives to send out your fishing fleet to scoop up another catch before all the fish are gone.
There are ag producers on the west coast who cannot obtain containers regardless of cost. That article quoted a 2x increase - there are plenty of people who would gladly pay that and more, but containers cannot be sourced.
Markets are not magic - they don't let you ignore physical reality. They're just an eventually-consistent system that aligns incentives to meet demand. It's like a transcontinental trip: you can spend maybe $150 in gas and get there in a week, or you can spend $700 and get there in 6 hours - but (at least until Boom starts flying) you're not going to get there in less than 5-6 hours no matter how much you're willing to spend.
One reason is given in the article: it’s more profitable not to wait to load up the empty containers and instead to go back and quickly ship another full load out of China
I guess eventually the prices have to catch up
Edit: I misread this is not clearly stated but I think still somewhat implied since they are not waiting for cargo to ship back they probably aren’t waiting for empty containers either
https://www.vesselfinder.com/ports/USOAK001
https://www.vesselfinder.com/ports/USLAX001
(It looks significantly better than a month or two ago, though, when ships were anchored 30-40 miles offshore because there was no more space for them.)
It's 45°C for storage. There might be a higher limit for shipping.
https://www.nytimes.com/2021/03/24/world/middleeast/suez-can...
100 ships stuck behind it.
When it rains, it shit pours...
Someone there posted https://www.vesselfinder.com/?imo=9811000 for real-time status, which seems to show the ship is still stuck.
This bad? Who knows at this point.
https://www.bloomberg.com/news/articles/2021-03-24/suez-bloc...
However that doesn't fix the problem of ships being out of balance too.
Cheaper energy and AI to assist with shipping (and maybe operating sealed power plants authorized by major nuclear world powers).
There are flat-pack containers, but they don't have the robustness or water-tightness of conventionally-built containers. People abuse container working limits something awful to squeeze pennies, so the flat-pack version will end up net costing more.
If the US Navy designed a nuclear-powered container ship class for rapid ultra-heavy-lift capacity, like enough to haul over an entire light (400,000) army group in one pass, then that's probably around 200, maybe 300 ships? The fastest sealift in US Navy inventory is 33 kts, so a nuclear-powered one with no fuel concerns could probably put on another 30% to that easily, so around 40 kts; much faster and they'll start outrunning most naval escorts.
Not every warfighting artifact fits in a container of course, but the military has the luxury to be able to define their own extensions to the ISO standard (and they have, with the bicon/tricon/etc. standards).
There are about 5,300 container ships in the world, so at the high end this would be about 5% of world capacity. Maersk operates a fleet of around 700, so it isn't too outrageous, if the US wants massive force projection. Such a fleet could step in to preserve national-security-critical supply chains. Coffee IMHO, is not national-security-critical, heretical as that may be.
For the record, I'm against the US projecting force around the world. It's not worth it IMHO, but like most people on the outside of the US looking in, I'm outvoted. On a strictly we-must-be-the-hyperpower-at-any-cost basis however, it makes sense for such a posture to invest heavily into that kind of ultra-fast, ultra-heavy-lift logistics capacity at that kind of scale. I'm just glad that the kind of leadership glamour disease that has befallen so many US corporations has seeped into its military, and they'll never believe in the benefits of unglamorous logistics and infrastructure until it is too late to fund.
I wonder if there's a good systemwide way to handle this problem.
Airlines use "irrops" -- irregular operations -- teams to handle big weather events, to get their airplanes to where their passengers are waiting. I suppose ocean shipping has similar irrops protocols. But the grounding of the Ever Given in the southern Suez Canal indicates that shipping irrops teams ignore actual weather events at their peril.
See Peter Senge's The Fifth Discipline.
From someone else quoting TFA:
>> Anticipating major industry collapse, the Carrier Alliances showed remarkable discipline in aligning supply with demand as early as February; removing trade capacity from the seas by halting vessels and shipments. By doing so, the erosion of ocean rates was kept to a minimum. Basing their reaction on potential worst case scenarios, shipping carriers artificially created under-capacity. This made available space come at a premium and therefore significantly raised the cost of container shipping, stabilizing revenues for carriers.
It seems the constraint is artificial.
edit: moved >
Mills were producing steel well below cost for a long time, but ore prices have gone up and some inefficient mills are being shut down, so supply side costs increasing. Mills also reduced capacity significantly in 2020, causing a production bubble.
https://www.fitchratings.com/research/corporate-finance/glob...
How is this possible? Government subsidies?
As others have pointed out, you don't easily stop and start foundries.
In the meantime, iron ore prices are spiking.
Chinese sanctions on a broad range of Australian products were being supported by the Trump admin ("America First") but that is now changing. If conditions deteriorated and iron ore sanctions happened (by either China starting something in the South China Sea or some stupid Corona sanctions) then the Chinese economy would grind to a halt and metal prices globally would spike, and we'd be melting containers down for their scrap value.
I mean, suborbital container launches.
It's almost like buying products from slaves in Asia and transporting them across the ocean is bad for the planet and the citizens of the planet.
They make the crap, make slave wages, amazon flys it over and makes all the $$$. You should get excited about that.
Fixing the environment is no more complicated then making our products in our own countries and paying appropriate wages.
Instead we let China pollute the planet with coal power plants and ships that pollute.
* https://theloadstar.com/where-have-all-the-pallets-gone-on-s...
That's a worrying prospect. Do you have a source linking the two?
"As the pandemic spread out from its Asian epicentre, countries implemented lockdowns, halting economic movements and production. Many factories closed temporarily, causing large numbers of containers to be stopped at ports"
If everyone masked/maintained hygiene/social distanced, then lockdowns can be lessened, but the best way to stop infections is to stop providing the environment were infections can occur.
Unless there are both effective and scalable treatment options, then some form of isolation is the only alternative.
Also, Texas recently lifted all the restrictions couple weeks ago, and number of cases and deaths is still falling.
I'm sure there are more examples like that.
The truth is that while this data is interesting, it's not enough to tell us how effective lockdowns are.
I feel like your statement is essentially "no disease and no lockdown is preferable to disease and lockdown"
Of course, like any other disease there will be some death, particularly for old people and people with underlying condition but nothing that could cause problem as greater than mass lockdown.
My statement is essentially, some disease is preferable than mass lockdown.
Wanting to eradicate disease is good and I support it but not with something that caused massive problem that is worse than the disease.
You might have been radicalized...
It doesn't make sense to have solution that worse than the problem.