Some interesting numbers about container shipping

by philg

“The Hidden Costs of Containerization” (prospect.org,m February 2022) was recently emailed to me by a reader. It contains some fascinating numbers:

According to data from the Marine Exchange of Southern California, as of the first week of January, there were 105 container ships backed up outside the Ports of Los Angeles and Long Beach, by far the busiest ports in the United States. There was more cargo in the water offshore than the ports processed in all of November. Across the world, nearly 400 container vessels have piled up outside U.S. and Chinese ports, carrying 2.4 million containers.

But why? If factory output is lower due to shortages and coronapanic shutdowns, shouldn’t we actually expect there to be a smaller number of containers going through the ports and no backlog at all?

By contrast, the crisis’s big winners are the nine ocean carrier companies controlling 80 percent of global shipping, which are raking in so much money that they have no reason to fix the problems and end Valeriano’s virtual imprisonment. The price of shipping a 40-foot container from China to the United States was once around $2,000. By August, it had soared to a record $20,000, a tenfold increase. By January, rates receded, but only to around $14,000, still enough to produce incredible profits for a concentrated industry. Shippers earned $25 billion in 2020; research consultant Drewry predicted $300 billion for 2021 and 2022.

Making money is a dirty business:

Nearly all cargo ships use low-grade ship bunker diesel combustion engines to power themselves. Some of the biggest tankers can carry approximately 4.5 million gallons of fuel. Ships emit a plethora of toxic substances such as CO2, nitrous oxides, and sulfur oxides, which are known to cause acid rain. The pollution one ship emits produces the same amount of pollution as 50 million cars; emissions from just 15 ships would be the equivalent of all of the cars in the world.

Do we believe this? Cars operate perhaps 2 hours per day while ships run 24 hours per day, so we can divide 50 million by 12 = 4 million. A car engine might be producing 20 horsepower on average, so that’s 80 million horsepower continuously from 50 million cars. A big container ship uses an 80,000 horsepower engine (example: the Evergreen A-class). If we assume that the container ship uses 100 percent horsepower at all times, it can pollute more than the 50 million cars only if it produces 1,000 times as much pollution per unit of power.

The rich white people who buy all of the junk in those containers aren’t affected, of course:

Port-adjacent communities in Southern California are habitually covered in a blanket of smog emitted from ships and trucks idling in and around the ports. Yale researchers found that a 1 percent increase in vessel tonnage in port “increases pollution concentrations for major air pollutants by 0.3–0.4% within a 25-mile radius of the 27 largest ports in the United States.” Black communities are disproportionately located near ports, and Black people are more likely to be hospitalized for port-related illness.

“The communities that are being harmed by shipping activity are not evenly distributed,” said Danyluk. “It tends to be low-income communities of color … People who are already being marginalized and exploited for whatever the reason are disproportionately impacted by this activity.”

Here’s a specialized container ship docked in San Diego that everyone can love… it contains only bananas:

But why is a ship that operates in the Pacific named the Dole Atlantic?

13 thoughts on “Some interesting numbers about container shipping”

  1. “If we assume that the container ship uses 100 percent horsepower at all times, it can pollute more than the 50 million cars only if it produces 1,000 times as much pollution per unit of power.

    This probably is the case, at least for certain pollutants like sulfur,

    “Heavy Fuel Oil is highly concentrated in sulfur (35,000 parts per million). This means global shipping accounts for 8% of global emissions of sulfur dioxide emissions (SO2), which is highly acidic when mixed with water making shipping a major contributor toward acid rain and other respiratory diseases.

    https://www.forbes.com/sites/nishandegnarain/2020/08/14/what-is-heavy-fuel-oil-and-why-is-it-so-controversial-five-killer-facts/

  2. “Black communities are disproportionately located near ports…”

    https://www.latimes.com/business/la-fi-dockworker-pay-20150301-story.html

    LA Times, 03/01/15 – How longshoremen command $100K salaries in era of globalization and automation

    “About half of West Coast union longshoremen make more than $100,000 a year — some much more, according to shipping industry data. More than half of foremen and managers earn more than $200,000 each year. A few bosses make more than $300,000. All get free healthcare.”

  3. One of the major costs of shipping includes the union jobs on the docks. In 2017, one article quotes the salary at $123, 278. If we apply the same % increase of inflation to the Longshoreman, that we see with the IKEA workers, that number is now, $178,753. Sourcehttps://www.mercurynews.com/2017/06/02/longshoreman-lottery-results-announced-for-long-beach-la-ports-find-out-if-youre-on-the-list/

    Other costs likely include the security measures the crew now has to maintain to avoid another Maersk Alabama incident: https://en.wikipedia.org/wiki/Maersk_Alabama_hijacking.

    Although today’s costs are escalating, we have the future to look forward to with: World’s first crewless, zero emissions cargo ship will set sail in Norway! https://www.cnn.com/2021/08/25/world/yara-birkeland-norway-crewless-container-ship-spc-intl/index.html

  4. It used to be that cargo ships only made money when they were moving. That’s all turned upside down like everything else. Don’t live in a house you own because the next economic stimulus package is just around the bend.

  5. Weird you’d become interested in container shops now and not when your boy Bitch McConnell’s wife, Elaine Chao, was the Secretary of Transportation and used her position to advantage her Father’s business one (or multiple of?) of those 8 big carriers you named.

  6. Philg, Heads Up!

    This story has everything: https://nypost.com/2022/07/24/elon-musk-begged-googles-sergey-brin-for-forgiveness-over-alleged-affair-with-wife/

    1- Art Basel Musk had an affair with Brin’s wife at a swank art festival in Miami Beach last year https://philip.greenspun.com/blog/2021/12/07/art-basel-miami-2021/

    2- Real World Divorce Shanahan wants much more than a prenuptial agreement calls for and Shananan’s side saying she signed the pact under duress while pregnant

    3- Covid Karening: Shanahan’s marriage to Brin was also strained at the time over problems related to COVID-19 pandemic shutdowns and the care of their daughter

  7. Well I confess I don’t understand it since one of my FB friends is a Union dockworker in NJ and all throughout the pandemic and beyond he’s been telling people not to blame the Union or its workers, and that goods are moving faster off the boats than ever. I guess I have to take his word for it, and so do we all, apparently.

    But I think there’s a whole lotta stink going on.

  8. Also, since I’m not a Union member working as a longshoreman at a dock, I can’t say for sure whether container ships are being unloaded and reloaded as quickly as they should be, but it seems pretty simple to me that a Boss could just say: “Well, brothers, we’re gonna slow down here and take things REAL careful for a couple of years and those poor assholes out there are just gonna have to wait until we get the all clear. Los Angeles is the largest container port in the world, and if those mofos have to wait, they have to wait until. In the meantime, go get a couple tacos.”

    The article’s biggest shortcoming is that they don’t connect the dots all the way.

  9. As someone who has worked in this industry virtually my entire working career maybe I can clear a few things up. At least in regards to the port of LA.

    First, it’s true ships use bunker fuel. When approaching the port, however, (I forgot how many miles out) the ships must power down, which drastically cuts emissions. Once docked, most ships are now required to “plug-in” instead of keeping their engines running. This is an ongoing process as ships are retrofitted to do this.

    The “backlog” was created both by Covid, and by the practice of shippers to leave their containers on the dock instead of moving them to warehouses inland. The twin ports of LA/LB have threatened to charge upwards of $100.00 per container, per day for unmoved cargo…they have yet to implement this because the threat of fines alone has helped. Local pollution does effect the city of Wilmington (which is low-income) compared to the neighboring cities of San Pedro and Long Beach, both of which are far more affluent. This is mostly due to the prevailing winds which blow the pollution towards Wilmington.

    Covid also inflicted it’s damage on the Longshoremen, who never stopped unloading ships throughout the entire pandemic…hundreds caught it and dozens died. Longshoremen have set records virtually every month for the last 18 months trying to reduce the backlog, and they have been successful but a smaller backlog still persists.

    The funniest part of these comments is always how people like to point out how much money Longshoremen make. It is certainly nowhere near “a major cost of shipping”. Contract negotiations are going on as we speak. The estimated cost to pay West Coast Longshoremen has always been less than 2% of a shipper’s cost. Here is Phil’s quote:

    “By contrast, the crisis’s big winners are the nine ocean carrier companies controlling 80 percent of global shipping, which are raking in so much money that they have no reason to fix the problems.”

    There it is. Most of your basic Longshoremen don’t make six-figure salaries. You have to advance in the industry and become a Foremen, Crane Operator, or a Super-Cargo (which is basically a clerk who routes cargo and designs ship loading plans to make six-figures. So called “free medical care” is negotiated in the contracts, as are pensions. What’s a real shame is all of the other industries who have forced employees to work without any benefits, only to increase profits that NEVER get passed on to consumers. Also, the Longshoremen do not produce a product, they provide labor. Their efforts do not cost consumers more…remember, shippers don’t produce a product either….they simply provide transportation.

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