51–60 of 224 posts
Low interest rates definitely explains part of it. The one-year treasury bond rate is at 0.6%, which means that unloading the goods now instead of next year is worth only $87M if you assume no losses from business disruption.
Low interest rates definitely explains part of it. The one-year treasury bond rate is at 0.6%, which means that unloading the goods now instead of next year is worth only $87M if you assume no losses from business disruption.
nitpick -> I see 0.006 * 14.5bn as 87m? Or am I doing something wrong? Also you have to factor in that a large proportion of the goods might have sizable negative time value, especially if they're perishable, but also if there is any (highly likely) proportion of obsoletable tech in there. Perhaps that's what you mean by business disruption?
And yeah, obsolete tech is a business disruption, as is perishable goods. I wanted to also include things like having to pay a premium to expedite replacement inventory so that your store or factory keeps working while the goods are stuck on a ship.
This seems like a really good sign. We can only hope global shipping continues to shrink until we can get down to a level of consumer purchasing that is sustainable for the ecology of the planet.
Earlier quoted context omitted.
That's one way of looking at it. Of course, the more expensive shipping is, the less likely it is to ship inexpensive items, like food.
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?
It's a delicate curve. Perhaps gradually increasing tariffs can support the actual increase of local production. Perhaps taxing oil consumption to subsidize poorer countries farmers is another way to go.
Earlier quoted context omitted.
Which parts of the world would those be? From what I've read the problem is often the opposite - cheap grain imports from the USA destroying agricultural economies in Africa for example. I really don't think there are large parts of the world that would not be viable through local agriculture. Obviously, there will be islands etc for whom this isn't viable, but I doubt they were getting food by massive ships anyway.
Most of the northern hemisphere. You know, all those places where nothing grows for 6 months out of the year where prior to shipping food we had to rely on canned and preserved foods.
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…
For the vast majority of the people who don't live in the USA or Europe, life was certainly much worse back then. Foxconn might not be the best place in the world to work, but it beats the hell out of living in a small town under a Maoist government.
> even though they don't live here
We could have made a crapload of money off their insecurity by taxing non-occupied housing, perhaps even building ghost cities/property tax farms from scratch. We could have used the revenue on infrastructure or social services. But no, we didn't have the political will to do that.
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?
Local food production is a noble goal. Just sort of hoping that some industries will fail and force people to grow food locally, or starve, is not a very good strategy for achieving that goal. It's a delicate curve. Perhaps gradually increasing tariffs can support the actual increase of local production. Perhaps taxing oil consumption to subsidize poorer countries farmers is another way to go.
Earlier quoted context omitted.
How does insurance treat the use case where creditors seize the cargo and liquidate it to pay themselves back?
How does that work? Presumably the shipping company doesn't own the cargo.
Management didn't have a plan for an orderly shutdown, so when the company went into receivership, everything just stopped. Just like many failing startups, the web site continued to indicate nothing was wrong. They've now put up a spreadsheet with current vessel status, but that took weeks. The status has entries such as "Arrested", "Unpaid Canal Fee (Suez)", "Arrested by Bunker Supply Co. (Panama Canal)", and "Port labor rejected" (they're way behind on their payments)". There are about 500,000 containers stuck with Hanjin.
Admiralty law is especially harsh on bankrupt shipowners. In many jurisdictions, ships can be seized regardless of bankruptcy status. Some Hanjin ships have been seized. Some are waiting offshore until somebody puts up the money for unloading and refueling. There were four stuck off the coast of California. Hanjin has come up with enough money to get two of them into the port of Los Angeles and unloaded. Those appear to be ships Hanjin leased, rather than owned, and a court in Korea has told them to unload and return all their leased ships ASAP. Courts in about 15 countries are involved, trying to untangle this mess. The US Maritime Commission is trying to get cargoes unloaded, but they don't have much authority. Ports are unwilling to let Hanjin ships in unless they have enough money to fuel up, pay a crew, and leave - they don't want them stuck at their docks. Meanwhile, some of the ships are running low on food and water.
Then there's the empty container mess. In the container business, you pay a per-day fee when you hold someone else's container, so everyone tries to return their borrowed empties quickly. But most of Hanjin's empty container return points are shut down, and are not taking empties back. Many of those empties are on trailer bodies, and are tying up trailers needed to move freight. Truckers are angry about this. Shippers are having trouble getting enough empty trailers.
This will all get unwound, but it's going to take weeks or months. There are going to be really big post-Xmas sales as the delayed cargo is unloaded.