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Why billions of dollars of goods are stuck at sea

economist.com

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Re: Why billions of dollars of goods are stuck at sea

#121

Post by yourapostasy »

thesehands wrote: post #58
robrenaud wrote: post #45

Earlier quoted context omitted.

How does that work? Presumably the shipping company doesn't own the cargo.

Nope the shipping company issues a bill of lading as the goods are received for shipping that sets out who owns the container.

The shipping company doesn't own the cargo, but I've read speculation that the creditors can seize the ships, then demand payment to unload the cargo, and if they don't receive payment seize the cargo to discharge the "debt". I don't know how a bill of lading would work in that situation, where the creditor wasn't the original party that the customer signed a contract with, and I'm curious how much latitude a creditor has in situations like these to abrogate previously-entered contracts.

Re: Why billions of dollars of goods are stuck at sea

#122

Post by carapace »

themoogle wrote: post #91

So these ships are just sitting there off shore? What stops pirates from taking over the ships? What about the crews just taking what they want and leaving?

Or privateers? (I'm half-way serious here. It seems like everyone wants this to get resolved but there's a "log-jam" in the system. Possibilities for a creative solution?)

Re: Why billions of dollars of goods are stuck at sea

#123

Post by tehwebguy »

intrasight wrote: post #117
cc439 wrote: post #78

Earlier quoted context omitted.

A company that desperately needs parts stuck on one of these ships is only going to have at most, a handful of containers onboard. Those containers might be worth several million but then that one company would be shouldering 100% of the unloading costs for a negligible portion of the ship's cargo. Nobody wants to be the party that blinks first as the longer they wait, the greater the likelihood of another party payi…

Seems the very definition of "business opportunity" to me.

Right? You can work out a fee with all of the recipients that covers maybe all of your cost. Plus, free boat!

Re: Why billions of dollars of goods are stuck at sea

#124

Post by gumby »

ghostly_s wrote: post #82
gumby wrote: post #48

Earlier quoted context omitted.

> They will just buy insurance, and the insurance companies will figure it out. It's not that simple. Yes, premiums will adjust depending on the finances of the carrier but the cost of insuring the risk itself is quite variable and can be ruinous. The value of a delayed shipment of iPads is much higher than a delayed shipment of board games, yet Apple can tolerate the former while the latter could sink a company. The…

Doesn't Apple famously use overnight air for all their shipping needs? Or is that only for devices?

That's what I meant by "multi modal": they put most of it on ships but buy up enough air capacity to make the early deliveries. Once the ships start arriving they can abandon the air.

Re: Why billions of dollars of goods are stuck at sea

#125

Post by SwellJoe »

dmoy wrote: post #113
SwellJoe wrote: post #85

Earlier quoted context omitted.

Hanjin doesn't really qualify as a "smaller player", do they? So, it seems to indicate any shipping company could end up in trouble, if the sixth largest in the world can fail so catastrophically in such a short time. Given the size of the expenses involved, and how thin the margins are (particularly in a market that has more capacity than cargo), it seems like it's not easy to predict who will be solvent six months…

7th largest, like a couple percent of all shipping. Idk what your definition of small player is.

I don't either. I have no familiarity with the industry. Are there only eight companies doing it? I guess it's just that there's no such thing as a small company operating in this business. The scale just seems massive, to me; a single ship costs millions in operations alone.

Re: Why billions of dollars of goods are stuck at sea

#126

Post by Gustomaximus »

themoogle wrote: post #91

So these ships are just sitting there off shore? What stops pirates from taking over the ships? What about the crews just taking what they want and leaving?

> What stops pirates from taking over the ships?

Where are they offshore? Pirates are not globetrotters with ports all over the world. But if this was off the coast of Somalia type things you'd think it would happen. Unless they are only interested in the ransom in which case probably mot a good score anyway.

> What about the crews just taking what they want and leaving?

Most people dont steal because they know its wrong. Not because they couldn't get away with it before. And where are they off to? If you're a Filipino on a ship sitting off US coast, what your going to fill a lifeboat full of Chanel perfume, head for the coast, lug it from lifeboat and hail a taxi? Sell it somewhere and try and get out of the country you have no visa for and get back home... doesn't sound too appealing.

Re: Why billions of dollars of goods are stuck at sea

#127

Post by namdnay »

ars wrote: post #81
namdnay wrote: post #38

Earlier quoted context omitted.

Wouldn't it do more to encourage local food production and consumption? Thus reducing pollution while at the same time boosting farm economies in poorer countries which were previously flooded by lower-cost imports from richer highly efficient food-producing countries?

> Wouldn't it do more to encourage local food production and consumption? Thus reducing pollution No, local food production increases pollution. The lowest pollution is obtained when food is grown in the climate most suited to it. Transportation energy (or pollution) is absolutely minuscule compared to energy used in growing the food. Optimizing for transportation costs in food production is a horrible idea from an e…

I agree that you need to grow food suitable for the climate you are in. How does this clash with local food production? If you locally grow food that is adapted to your climate, surely that's the best solution?

I have difficulty believing that eating imported pineapples in the UK pollutes less than eating local apples

Re: Why billions of dollars of goods are stuck at sea

#128

Post by swehner »

superuser2 wrote: post #118
Animats wrote: post #59

This is a mess because Hanjin's top management was in denial about the possibility of bankruptcy. Just like the typical startup. They've been trying for months to get a bailout deal from somebody, anybody - a merger, loans, their parent chaebol, their stockholders (Korean Air is the largest), or the S. Korean government. Everybody turned them down. There's too much container ship capacity right now; nobody needed Han…

What happens to the crews of these ships? Can they leave? How? Who pays to transport them to shore? Under what authority are they permitted to walk on shore? Office and factory workers of a suddenly-derelict company can walk off the premises and go home. Imagine finding out that not only will the paychecks stop, you also can't leave your desk.

Doesn't look good for them. See http://www.bloomberg.com/news/articles/2016-09-06/hanjin-s-g...

But am not aware of reports about how things are for them this week.

Re: Why billions of dollars of goods are stuck at sea

#129

Post by brian-armstrong »

rabidrat wrote: post #109
gumby wrote: post #48

Earlier quoted context omitted.

> They will just buy insurance, and the insurance companies will figure it out. It's not that simple. Yes, premiums will adjust depending on the finances of the carrier but the cost of insuring the risk itself is quite variable and can be ruinous. The value of a delayed shipment of iPads is much higher than a delayed shipment of board games, yet Apple can tolerate the former while the latter could sink a company. The…

Maybe it will become cheaper for small board game companies to produce their games domestically, once shipping insurance is factored in.

You're talking about a change that takes years to complete, not something that will happen overnight. And production of any good requires some materials which quite likely will need to be shipped in anyway.

Re: Why billions of dollars of goods are stuck at sea

#130

Post by foobarian »

GavinMcG wrote: post #93
cyberferret wrote: post #92

Earlier quoted context omitted.

I wondered about that too. What if they all decided to simply abandon ship and head for land, leaving a ship to flounder and possibly become a hazard to other vessels or cause an environmental problem when it crashes into a reef or similar?

The officers, at the very least, would be criminally liable.

But suppose they ran out of food. And suppose there was no shuttle from the ship due to owner going bankrupt. I think they could probably call a mayday signal and get rescued by some other vessel.
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