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Comment by kmonsen | Hacker News Reader

If that is true the rates for empty containers should increase making it worthwhile for ships to bring them back again?

Elsewhere someone mentioned it’s cheaper to build a new container in China than to ship and empty one over from the US. Even if you are already sending the boat.

This sort of implies that it’s incredibly cheap to make the container, and/or it’s expensive to add that weight to the ship, and/or our ports are incredibly slow at loading empty containers onto ships.

Jack up the daily ground rate for empty containers until the market solves the problem and clears them out.

Edit: e.g. chop them, pack the result into containers, and ship it to Asia to use as raw materials for new containers.

Is it possible China is subsidizing creating the new containers exacerbating this problem?

Nope. China has the steel. China has cheaper labour. China has more efficient logistics systems to move container from place it's constructed to a port.

The answer to China being better at 99% of manufacturing isn't subsidies, it's efficiencies.

But this isn't manufacturing vs manufacturing. It's putting an empty container on a ship that is already going somewhere vs clawing tons of raw material out of the Earth, processing the raw material, manufacturing a container, transporting the container.

Sure but you asked if they are subsidizing them, the answer is no. Is it cheaper than waiting to load empty containers? It could be depending on the incentives, even if those short-term incentives are damaging to long term prospects you would be surprised how short-term most businesses think. Biggest influencing factor I can think of right now is that many importers/exporters are willing to pay exorbitant fees to get product from China to the US. This is specifically acute in areas/industries that there are no other viable source, say for instance LiFePO4 batteries. These are absolutely key to a huge number of things happening in the world right now and are outside of a few very isolated plants (CATL has one in California) made entirely in China.

There are so many insane distortions happening because of supply crunch that subsidies and trade nonsense are actually starting to become irrelevant. (though I really do hope USA sorts their shit out, their China policy is fucking up the world for zero reason).

You've hinted at what I'm trying to understand. What incentives are actually in place that are impacting this behavior? My hypothesis was that the CCP decided it's going to flood the world market with containers by subsidizing them. Maybe that's not what is going on, fine. But what specifically is happening? It sounds like maybe you don't know either.

Turnaround time is by far the most important thing for ships, so the turn around at first opportunity instead of loading empty containers.

Right it seems like if a ship leaves empty you might as well flatten all the containers because they won’t go back anytime soon. The solution is to make the ship pay for all that as a precondition to leaving empty

That would actually maybe be a good solution? If you leave empty next time port fee is double or whatever.

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