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The unsustainable growth of the container ship industry

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Re: The unsustainable growth of the container ship industry

#41

Post by wilkommen »

harpersealtako wrote: post #39
thfuran wrote: post #5

Earlier quoted context omitted.

>Of course the entire "make 5000 miles away, ship it over the pacific" was enabled by the lack of a proper carbon tax. I think this pretty much sums it up: >Shippers earned $25 billion in 2020; research consultant Drewry predicted $300 billion for 2021 and 2022.[...] A study by the National Oceanic and Atmospheric Administration found that pollution from cargo ships has led to 60,000 deaths per year and costs up to $…

How many people's lives are saved from increased access to trans-oceanic trade? I don't have an answer to that, but isn't it possible that the counterfactual world where no container ships exist involves worse health and mortality outcomes?

Probably not, national economies would just have to function more independently. The only way I can see how trans-oceanic trade results in better health and mortality outcomes is that it makes the various world superpowers more dependent on each other for trade, reducing the likelihood of large-scale armed conflict.

Re: The unsustainable growth of the container ship industry

#42

Post by nikanj »

6gvONxR4sf7o wrote: post #20

> No upstart carrier could possibly compete with the alliances; they couldn’t afford the massive startup costs to build or lease their own mega-ship. This is such a common pattern with optimization. Something starts small-ish, but gets optimized and optimized to the point that newcomers aren’t viable and everything gets locked in. It happens all over the economy, and the unprecedented scale of everything only makes t…

Money is practically free these days, so a bunch of college dropouts can secure a few billion in pre-launch funding to build their own mega-whatever.

Re: The unsustainable growth of the container ship industry

#43

Post by nikanj »

paganel wrote: post #24
smm11 wrote: post #17

We just need to run railroad tracks over the oceans.

One can still dream about the Bering Straight bridge (or tunnel) [1] coming to life someday, plus the connecting (and now missing) railway parts over the two continents. [1] https://en.wikipedia.org/wiki/Bering_Strait_crossing

If only it wasn't Russia on the other end of that bridge. Nobody is going to risk the investment of building the bridge, when it would be subject to the general instability of Russian internal/external politics.

Re: The unsustainable growth of the container ship industry

#44

Post by lolsal »

nikanj wrote: post #42
6gvONxR4sf7o wrote: post #20

> No upstart carrier could possibly compete with the alliances; they couldn’t afford the massive startup costs to build or lease their own mega-ship. This is such a common pattern with optimization. Something starts small-ish, but gets optimized and optimized to the point that newcomers aren’t viable and everything gets locked in. It happens all over the economy, and the unprecedented scale of everything only makes t…

Money is practically free these days, so a bunch of college dropouts can secure a few billion in pre-launch funding to build their own mega-whatever.

People can't get mortgages; I am skeptical that college dropouts could literally take out billions to create a shipping startup which is already a crowded space, without offering a significant value add, with no collateral or experience.

Re: The unsustainable growth of the container ship industry

#45

Post by mediaman »

Price of container shipping has skyrocketed due to high demand and the supply of ships being fairly limited, even more limited when the average trip time of a boat increases.

One question I've been thinking about is whether the ocean freight companies will respond by increasing supply of ships. These ocean shipping companies didn't actually make a lot of money prior to the pandemic: back when China-USWest prices were under $3k a container, their margins were actually kind of thin.

So if we've had all this consolidation, and there are now three alliances that handle most of the freight, what is the incentive to increase supply? Just a 30% increase in ship capacity would likely crater profits.

Is the industry going to respond with building more ships, or, like OPEC, will they be able to coordinate to constrain supply so that long-term rates settle down in the $6-8k range versus the If they are able to operate as a cartel, that will have major, long-term consequences for the dynamics of geographic manufacturing and supply chains. If they can't, then the pandemic will be a multi-year blip and we'll go back to hallowing out manufacturing and sending it to Asia.

Re: The unsustainable growth of the container ship industry

#46

Post by BirAdam »

nikanj wrote: post #43
paganel wrote: post #24

Earlier quoted context omitted.

One can still dream about the Bering Straight bridge (or tunnel) [1] coming to life someday, plus the connecting (and now missing) railway parts over the two continents. [1] https://en.wikipedia.org/wiki/Bering_Strait_crossing

If only it wasn't Russia on the other end of that bridge. Nobody is going to risk the investment of building the bridge, when it would be subject to the general instability of Russian internal/external politics.

Russia has had one ruler for a very long time, and that ruler has had somewhat stable (even if bad) policies. This makes Russia a more predictable place than say… the USA where every 4 years you risk having one extreme political view vs another in control of the country. One year you have peace with Iran and Cuba, and the very next year that’s off the table and it’s sanctions time. That’s a massive swing in political fortune.

Then there’s that thing of: should we? Absolutely, yes. Russia and the USA would destroy the Earth if tensions move to war. The US corporate press loves to say that Russians are massing troops on their border, but that’s within their own territory. Meanwhile, the USA has massed troops all over the globe with bases in nearly every country. The antagonisms need to stop. Peace needs to reign. The alternative is the death of the Earth.

A train connecting Asia and North America might be exactly the kind of thing to bring this peace to the table. Politicians respond to lobbying. Cargo freight is big business. If enough money lined their pockets…

Re: The unsustainable growth of the container ship industry

#47

Post by stcont »

lolsal wrote: post #44
nikanj wrote: post #42

Earlier quoted context omitted.

Money is practically free these days, so a bunch of college dropouts can secure a few billion in pre-launch funding to build their own mega-whatever.

People can't get mortgages; I am skeptical that college dropouts could literally take out billions to create a shipping startup which is already a crowded space, without offering a significant value add, with no collateral or experience.

Mortgages and equity funding aren’t really comparable since the terms of the instruments and risk tolerance of the investors is very different.

Just because someone can’t qualify for a mortgage doesn’t mean they can’t raise funds for a business.

Re: The unsustainable growth of the container ship industry

#48

Post by lom »

The article claims that 15 ships pollute as much as all of the worlds cars in terms of co2, but a minute of googling reveals that it’s not the case.. All cars pollute around 3 times more than all ships. That’s still a lot of pollution from ships, no doubt - but I don’t understand how two different sources can come to such different conclusions.

Re: The unsustainable growth of the container ship industry

#49

Post by PaulDavisThe1st »

6gvONxR4sf7o wrote: post #20

> No upstart carrier could possibly compete with the alliances; they couldn’t afford the massive startup costs to build or lease their own mega-ship. This is such a common pattern with optimization. Something starts small-ish, but gets optimized and optimized to the point that newcomers aren’t viable and everything gets locked in. It happens all over the economy, and the unprecedented scale of everything only makes t…

End government regulation. End government oversight. It's only government that can screw up the operation of a free market. /s

Re: The unsustainable growth of the container ship industry

#50

Post by lolsal »

stcont wrote: post #47
lolsal wrote: post #44

Earlier quoted context omitted.

People can't get mortgages; I am skeptical that college dropouts could literally take out billions to create a shipping startup which is already a crowded space, without offering a significant value add, with no collateral or experience.

Mortgages and equity funding aren’t really comparable since the terms of the instruments and risk tolerance of the investors is very different. Just because someone can’t qualify for a mortgage doesn’t mean they can’t raise funds for a business.

I just can't believe any financial institution would underwrite a large business plan with no collateral but would not underwrite a mortgage for the same person when they could repo the house/property if the mortgage failed.

I have no problem personally getting a mortgage, but even with a fantastic business plan I wouldn't give myself $10M for a shipping startup.

Am I totally out of touch?

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