Tag Archives: supply chains

Vietnam steel giant Hoa Phat moves into container manufacturing

Posted on April 4, 2022 by | 1 comment

Others are discovering that they can dump steel by making it into containers. While the Vietnamese steelmaker Hoa Phat mentioned in the article won’t be a large percentage of the demand, it’s significant.

And since more goods are now being exported from Vietnam compared to before the Chinese lockdowns, supplying new containers on the spot may be a better option than moving them from the US and other places.

This means there will be a glut of containers in importing countries. The only option may be to scrap them when they arrive. Ocean carriers and shippers will prefer to buy new containers at the exporting site rather than shift the old empty ones back for more cargo, at present fuel prices and increasing pollution and crew charges.

It’s a real waste to scrap the containers if they are used only once. While steel is recyclable, it’s a torturous road, and we aren’t set up to do it at scale. And a tremendous waste of effort.

All are examples of exogenous charges, as the economists say. They are not factored into the original price of shipping the goods, so they aren’t paid by the shipper. They also aren’t paid by the carrier. They instead erode the general welfare of the communities who have to deal with the empties. It’s a classic scenario in sustainability.

By Martina Li in Taiwan 04/04/2022

Vietnam steel giant Hoa Phat moves into container manufacturing – The Loadstar

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Posted in Logistics, Shipping, Supply Chains, Sustainability

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Grain shippers want regulators to press railroads on service issues

Posted on March 30, 2022 by | 1 comment

Long delays for trains on rail networks are worrying for farmers and users of grain. Significant delays have been observed, including full trains sitting while customers waited for the grain onboard. Rails have been suffering trying to keep trains moving. Many of rails’ complaints seem to be related to the workforce. However, it isn’t clear that rails have actually reached the point where they can impact these delays.

The figures shown in the graph are marked. Norfolk Southern seems to be far and away the worst offender in delays at the origin of train service. But the delays still seem to be large.

Grain consumers and producers rely on train service to move the product. And rails have a responsibility to provide it. How can the two be gotten together?

Joanna Marsh Tuesday, March 29, 2022

Grain shippers want regulators to press railroads on service issues – FreightWaves

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Posted in Logistics, Rail, Supply Chains

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Supply chain signals: New-container prices and production finally peak

Posted on February 16, 2022 by | 1 comment

There are some interesting statistics here about container production. The graph shows the price of new containers is dropping. Drewry estimates production this year will be somewhere around 4.5 million TEU, 70% of which is 40-foot containers. American companies are also buying 53-foot containers in China and shipping them to the US, where they are legally used on the road.

Price of new containers per TEU. Chart by Triton. Source: American Shipper.

Most containers are built in China. 80% of all new containers are built by three state-supported Chinese factories.

One of the issues no one is addressing is the buildup of ‘container waste’. So many containers are being built now because the need is in China, and it’s costly to transport the empty containers overseas. When the explosion of demand subsides, and we can see that might be starting, there will be less need for empty containers.

So where will the empty containers be? Piling up in the container yards in ports and warehouses in the US. The containers are expensive to ship back to China for reuse, particularly because of chartering costs. Adding ship capacity for empty containers is not a winner for ocean carriers when they can be built in China.

Container waste in certain locales is probably going to be a problem in places in the US where there is an excess of importing. The US does not export enough, even if we somehow increase the agricultural exports in containers, currently around 10% for some crops like soybeans. Those containers have to be stored or sold for houses or storage, or scrapped for the steel. China is ‘dumping’ steel on us again, but in the form of fabricated products— containers.

Now that land transport costs are escalating, it is starting to be costly to transfer empty containers on land in the US. That reduces the possibility of shifting them to an exporter’s location for loading.

Quite a conundrum. The container trade is bumping up against some sustainability issues other than smokestack emissions.

https://www.freightwaves.com/news/supply-chain-signals-new-container-production-and-pricing-finally-peak
https://www.freightwaves.com/news/how-long-does-it-take-to-build-a-shipping-container

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Posted in Logistics, Shipping, Supply Chains

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