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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

#191

Post by dredmorbius »

wmil wrote: post #30
marme wrote: post #18

Earlier quoted context omitted.

yes but that is the major fear the docks have. No debt holder is going to repossess a ship at sea they are going to wait for them to dock then file a court order to prevent them from undocking until the repossession proceedings finish. This means they are stuck at the dock taking up space the dock owners want to use to unload other ships so they just ban these ships from their docks letting another dock deal with it…

I don't understand how they can legally do that. When you repossess a truck you don't get to leave it at someone else's loading dock for free. Wouldn't it be the creditor's obligation to pay the fees or move it somewhere else to be moored?

More on Ship Arrest, via a (non-maritime) lawyer on a G+ discussion: http://www.marineinsight.com/maritime-law/ship-arrest-under-...

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

#192

Post by dredmorbius »

woodandsteel wrote: post #120
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…

This is one thing I love about HN. Whenever there is something big going on in some industry, there will be people posting comments here who work in the industry and will explain what is happening, and usually in very clear terms. I guess this is because every big industry runs on commuters nowadays, so there are all these people who both are in the industry and read HN.

NB: Animats is intelligent and quite knowledgable. I'm not aware that he's worked in shipping. Well, unless you count ballistic orbital delivery.

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

#194

Post by lmm »

icantdrive55 wrote: post #39
the_watcher wrote: post #20

Earlier quoted context omitted.

So your solution to sustainability is for everyone to just accept a lower quality of life? Yea, good luck with that.

I'll get hammered for this, and I know it would take some time to tool up, but were the 50's through the 70,s that much of a lower quality of life? (Relied a lot less on overseas shipping--for a few reasons.) Oh, yea, we would have to get used to paying more for some things, get used to paying Americans a decent wage, get used not being able to manufacture in the cheapest countries, get used to the poor having better…

> were the 50's through the 70,s that much of a lower quality of life?

Yes, they really were. At least, I remember the '90s, and quality of life was a lot worse back then, I assume the trend continues as you go further back.

> Those people at Foxcon, and other Chinese/whatever countries workers seem like they are treated so well. These foreign countries care so much about the enviorment.

Chinese wages are trending upwards and China is putting a lot more environmental regulation in place - to the extent that some manufacturers there are now offshoring to poorer countries. Will it take them time to catch up? Yes. Are they doing it a lot faster than the US did the first time around? Also yes. It would be a bizarre kind of ethics that said that it would be fine for Chinese workers to earn less and Chinese factories to pollute more as long as we weren't buying from them.

> Some foreign enterprising individuals become rich, and buy American houses, even though they don't live here. That last one is great.

Their reasons for doing that are the same as Americans' reasons for doing that (which they do quite a lot - it's just easier to blame everything on evil foreigners). Fix the incentives and you'll fix the problems. If you don't like empty houses, how about strong squatters' rights?

> At one time, we got along fine without the cheap goods from other countries

We didn't "get along fine". We survived, but life was a lot worse.

> Oh yea, the cheap cost of goods at Apple don't seem to be passed on to consumers?

I have no idea why people buy expensive things from Apple when they can get better versions cheaper from their competitors, but that's their lookout.

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

#195

Post by dredmorbius »

astrodust wrote: post #95
neffy wrote: post #34

Earlier quoted context omitted.

Oil is much less of a factor in shipping costs than people realise. These container ships are incredible, in terms of what they can carry versus the cost of the fuel.

The amount of fuel these ships burn is absolutely nuts, as much as 200-300 tons per day, approximately 65,000 to 95,000 gallons of the stuff, but the size of the ships is even more stupidly crazy, upwards of 150,000 tons, that they're actually quite efficient when you do the math. It probably takes 5,000 trucks to carry the containers stacked on one of the larger cargo ships and they burn way more than 19 gallons of…

Shipping has always, and by always, I don't mean "since 1932", but since prehistory, been vastly cheaper than overland freight. The old time differential was about 20:1.

Today, marine freight can move a ton nearly 1,000 miles on a gallon of fuel. Rail maxes at about 400 ton miles/gallon, trucking is about 50 tm/g.

Adam Smith's Wealth of Nations has a telling comparison of ship vs wagon travel from Edinburgh to London in the 1770s. Smart money was in boats.

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

#196

Post by throwaway049 »

x1798DE wrote: post #116

You occasionally hear about immigrants being smuggled into (a) country in shipping containers. Is that common enough that it's likely that one or more of the stalled containers has a bunch of people stuck in it? That seems like a really unfortunate scenario...

I hope and suspect smuggling in shipping containers is mostly done in the overland phase of the container journey: SE europe to NW europe for example.

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

#197

Post by jpatokal »

PeterisP wrote: post #184
butbroski wrote: post #183

Earlier quoted context omitted.

What happens to the ship isn't really the crew's problem. Eating? Paying rent? These are the crew's problem. You can't seriously expect them to prioritize the employer that isn't paying/feeding them over their own well-being.

It is their problem; they will get paid in full by staying on ship (no matter what happens to their employer) but will forfeit that pay by abandoning the ship, and for the officers, there is the abovementioned criminal liability if the abandoned ship causes any harm (e.g. by leaking chemicals from cargo).

Not following you here: who exactly is going to pay them if their employer is bankrupt, which is the case here?

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

#198

Post by PeterisP »

jpatokal wrote: post #197
PeterisP wrote: post #184

Earlier quoted context omitted.

It is their problem; they will get paid in full by staying on ship (no matter what happens to their employer) but will forfeit that pay by abandoning the ship, and for the officers, there is the abovementioned criminal liability if the abandoned ship causes any harm (e.g. by leaking chemicals from cargo).

Not following you here: who exactly is going to pay them if their employer is bankrupt, which is the case here?

They're sitting on a ship + cargo that is far more valuable than their outstanding pay, and legally they have a priority claim over all of that.

While the cargo is owned by others, and the ship may be sold during bankruptcy, but maritime law prescribes that none of them can get their stuff until the crew has been paid in full; so in essence they can (and will) hold these billions of dollars of goods as hostage. $16b / 66 Hanjin ships means that an average ship will have cargo $250 million worth, and if anyone wants to receive that cargo, they'll find a way to pay the outstanding wages, which is, rounding to whole millions, approximately 0.

They can also get food and 'maintenance fuel' (enough for running the internal systems, not the huge amount required for main engines) with the ship/cargo as effective collateral, even though they're not the owners - it's the owners legal responsibility to supply that, the crew is authorised to run up a bill and the owner (the new post-bankruptcy owner) will have to pay that or get the ship seized until they do.

The main trouble of these seamen is that it will take an unknown amount of time to get this settled, not that they'd not get paid for these months.

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

#199

Post by ethanbond »

nols wrote: post #103
ethanbond wrote: post #96

Earlier quoted context omitted.

As a thought experiment... let's say your pirate crew has an unloading port someplace. Why not take the ship and get going to said port? Would the crew alert the navy/coast guard? Probably. But then what? The navy kills the pirates and liberates the vessel... And Hanjin refuses to take it back? The navy now has the responsibility of getting it to port and unloading it, despite ports not wanting to do that?

Pirates do hit container ships, actually some even hire hackers to locate the high value cargo to steal. A bankrupt shipping company doesn't really change much, since the ship is still worth millions. If pirates stole and abandoned the ship then at worst salvage laws apply, and a salvage company would go out and take over. The ships aren't worthless because the company is bankrupt, there's just an issue with operatin…

Thank you for actually contributing to my understanding rather than just saying "it'll be dealt with by someone!" as if the situation as-is shouldn't already have been dealt with by someone.

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

#200

Post by ethanbond »

astrodust wrote: post #105
ethanbond wrote: post #96

Earlier quoted context omitted.

As a thought experiment... let's say your pirate crew has an unloading port someplace. Why not take the ship and get going to said port? Would the crew alert the navy/coast guard? Probably. But then what? The navy kills the pirates and liberates the vessel... And Hanjin refuses to take it back? The navy now has the responsibility of getting it to port and unloading it, despite ports not wanting to do that?

Unloading these ships with state of the art equipment takes upwards of twelve hours. Many of those containers have GPS tracking devices embedded in them. The sorts of ships routinely subjected to piracy are those carrying an easily transportable commodity (e.g. oil) that can be pumped out or stolen quickly and offloaded on a market without arousing suspicion. You'd spend weeks going through all those containers to lo…

Very interesting! That's actually pretty shocking that they can be unloaded in 12 hours. I would've expected far longer than that, though now thinking about it I suppose it seems reasonable with all those crazy crane systems that industrial docks have.
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