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Comment by ilwu_member | Hacker News Reader

I am a member of ILWU 13. A couple thoughts after reading the comments:

The zoning change is for TEU storage outside the port. The port itself was not subject to that rule.

The Port of Los Angeles is a landlord and is not directly involved in operations.

Private companies, such as APM, EverPort, and others, rent piers/berths and are responsible for the actual operations and logistics.

Some speculation: recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty. I suspect this behavior is what turned the congestion we had before into the quasi deadlock we have now.

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Seems like more of a tragedy of the commons, with each ship (A) assuming it's fine to leave empty because some other ship (B) will grab the empty containers. That's all well and good until (A) comes back, and then it sits there waiting like everyone else.

Going back empty works once. Or more times if you're headed to a different market, I suppose.

I thought the price for containers had more than quadrupled. How can leaving them behind be economic?

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

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

This is the question that ties into mine — if the economic incentives have changed (i.e. there is no penalty for renters of containers to not get containers back to their primary shipper) then this is a perfectly reasonable response to the change from Covid to today — i.e. the new game is moving the ship as fast as possible with no downtime. If the demurrage is still incurred, then there’s some other alternatives that do not appear to be completely without nefarious intent.

I can’t help but think these decisions are being made on some assumptions from data produced by buggy software algorithms…

Hopefully we’re doing better than that!

If a single extra trip is lucrative enough and at current rates it’s 5-10 regular prices that would make sense to forgo loading in the us and just hurry home

For awhile that’s beneficial to the shipper until all containers are empty in LA and none exist in China to fill.

pretty sure chinese companies will be happy to produce new containers for a small fee

I suppose at some point it becomes cheaper to melt down the containers and ship them back as raw steel to be rebuilt in China.

It might be other forces driving their decision. Maybe the ships are booked and are already late to pickup next load with penalty clauses for delay, or the port has other costs that mean it wants to speed up getting the next ship unloaded.

And what is the delay time if the ships decide to wait to load containers for the return?

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

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

> ... recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty.

If this is happening, what would be the consequences of allowing even more TEUs to be stored on the US side?

Shit is going to take longer and be more expensive to come from China because when there isn't a TEU available you have to wait for one to be fabbed and pay for it.

Yeah but the ship operators don’t pay for this so everyone is optimized for personal profit not system efficiency

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