Seems a little crazy that ships can charge truckers for the empties not being returned when they won't even take the empties back? I feel like that one stuck out to me as a bit odd
Something feels amiss in the long term business relationship ship liners are trying to foster at the moment.
> The real issue, Schrap says, is just that the shipping companies won’t take their empty containers back: “The ocean carriers need to come sweep out the empties.” Adding insult to injury, the ocean carriers bill truckers a late fee every day for unreturned empty containers, Schrap said, even if they won’t accept them at the port. “It makes you want to pick up your laptop and Frisbee it out into the backyard,” Schrap said. “That’s the frustration running through our veins.”
This is a financial bazooka aimed at small importers/exporters. Forget the empties stacking up as an eye sore, this is the crisis -- charging late fees on something the ship liners won't take back.
Oh man, we could sit around the fire and tell stories all night on this topic.
It's even better when your customer is the primary logistics on the other end, especially when they wanted a better price and they forget to bring the container back for a couple days.
That was our rookie mistake, not having logistics across the lake or not doing exworks.
"Amateurs think strategy. Professionals think logistics."
"Long term" in MBA speak is an evil curse. They want to make the numbers for the Quarter, they don't give a hoot about anything past that... that's for Future MBA to worry about.
What likely happens is that the shipping line is sending these charges out automatically (global systems, huge company, etc). Which are then usually disputed as the terminal isn't accepting the empty.
The story makes it out that a shipping line is behaving more strangely than what happens in practice.
Honestly, it might go on long enough that figuring how to smelt the containers might be viable given the high cost of metals.
They seem to cost about 2,500-4,000 to purchase new, so theoretically they could make 20-28MM loading them with empties (if they were worth the same as new). I don't know how long it would take to load the ships with cargo, but there are currently $24MMM (that's 24 billion) in goods anchored outside the port of LA waiting to be unloaded. So 3 orders of magnitude higher. How much of a premium must load/unload capacity be at right now?
If we weren't truck limited, we could just move all the empties far away and stockpile them until they can be profitably returned. But I know people who have tens-of-thousands of dollars in tons of raw materials (think universal inputs) stacked in a warehouse they have to vacate soon and they cannot even give it away because of transportation costs. They're going to have to pay someone to take away the things they (correctly assumed) they could buy for almost nothing last year and would be worth more today.
So the Maersk E-class capacity of 10k--14k TEU translates to 5k--7k containers of the size you're probably used to seeing.
A 40' container is either 2 or 2.25 TEU. The .25 is when the container is a bit higher than standard. Though nowadays loads of containers are a bit higher. The extra .25 is ignored in various cases (basically when it doesn't matter).
https://en.wikipedia.org/wiki/Evergreen_A-class_container_sh...
https://en.wikipedia.org/wiki/List_of_largest_container_ship...
I did in fact note that:
>> (Note, I'm talking about 40' containers, but the industry talks about 20' so you may find double my numbers on a search.)
There's a specific standard for describing sizes (TEU), and, confusingly, an overwhelmingly prevalent size actually used and which most people will be familiar with of precisely twice that length (40'). The ships you referenced would be carrying 5--10k TEU, not 5--10k 40' containers.
Its' a minor point in the context of the Flexport story, but the inaccuracy seemed worth clarification. That is all.
If you feel like I'm inaccurate after that clarification, then let's continue. I'd hesitate to continue a nomenclature argument online, but since it changes the numbers I've been talking about be a factor of 2, it seems worth resolving.
Explanation appreciated.