
Ship scrapping accelerates ahead of Panama Canal launch - protomyth
http://theloadstar.co.uk/ship-scrapping-accelerates-ahead-panama-canal-re-opening-victims-get-younger/
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kcorbitt
> For example, rates for a 4,400 teu gearless panamax ship of $5,400 per day,
> are a staggering 63% below the market rates of a year ago, and in many cases
> are below the daily operating cost.

TIL you can rent a Panamax cargo ship for $5,400 a day! That's definitely
cheaper than I would have expected. Someone should park one of those in the
San Francisco bay and convert it into apartments.

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mapt
You act as if land scarcity was the issue in San Francisco, rather than legal
permission to establish an abode. If people started doing this, the city would
find a way to ban them from doing this.

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mikeash
That's why people want to park the ship far enough out that it's in
international waters:

[https://blueseed.com](https://blueseed.com)

~~~
cjensen
BlueSeed is such a hilariously bad idea, it should be in some kind of hall of
fame. (Of course, you're just pointing it out, not advocating it!)

1\. A landlord who doesn't have to obey any laws regarding rent and terms?

2\. The Farallon Islands are offshore from SF, so the 11 mile limit is
actually much further than BlueSeed acknowledges.

3\. The "Potato Patch" shoal offshore from the Golden Gate makes for nasty
waves for many miles in every direction. Guaranteed sea-sickness on every
Ferry.

4\. If you think SF is cold in Summer, try offshore. The heating costs alone
will be astronomical. Fog and fog-colored water is all you will see for most
of the year.

5\. It's going to stay offshore when we get Tropical Storm-level winds in
Winter?

6\. One Ferry doesn't cut it -- you need a Plan B for when the Ferry needs
maintenance. Ferries are incredibly expensive to operate, which is why there
are so few on the Bay.

7\. Surely that's a commercial use, and subject to the 200-mile economic
exclusion zone?

8\. High speed internet? Not when the Fog is drizzling.

9\. Presumably it will have to have generators. If you had to rent generators
for your businesses and run them 24/7, how much would that cost you in fuel
alone?

10\. Your generator will also be powering a desalination plant.

11\. Nuclear waste? Yep, you'll be parked where the nuclear waste was dumped.

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burfog
Being within 200 miles probably affects the ship, not the people. It would
likely mean being US flagged and/or owned. You can forget about the ship being
Panama flagged and Cayman Island owned.

This of course gets you US law and the US navy, for better and worse. (taxes,
environmental regulations, etc.) It doesn't actually put you in the US though,
since you're 11 miles out, so the people shouldn't be affected by immigration
law.

I think a bigger problem is just the poor value. The ship presumes that people
can't work from the other side of the world, but somehow they can work if they
are only an annoying ferry ride or an expensive helicopter ride away. Who are
the users who need to be close, but not really close?

~~~
lmm
> The ship presumes that people can't work from the other side of the world,
> but somehow they can work if they are only an annoying ferry ride or an
> expensive helicopter ride away. Who are the users who need to be close, but
> not really close?

You need everyone in a room, and that room needs to be somewhere your venture
capitalists are willing to visit every few months?

~~~
ghaff
If only there were a way to get to a location more than 15 miles from the Bay
area every few months. Darn. Someone needs to disrupt the stagecoach industry.
:-)

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mikiem
To understand this article (swiped from Wikipedia):

TEU: Twenty Foot Equivalent Unit is the unit of the capacity of a container
ship, a container terminal and the statistics of the container transit in a
port. The two most common international standardised containers are those of
twenty and forty foot.

LDT: Light displacement ton, the weight of a ship without anything on board,
used to determine the value of a ship which is to be scrapped

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Shivetya
Going to have to say this is likely more do to consolidation in the industry.
the top 10 shipping companies control two thirds of the capacity so when
others join forces allowing them to share capacity they no longer need their
own ships or simply need less.

Removing these ships saves money on crews, taxes, maintenance, and more. Throw
in sharing capacity with other similar minded players and removing this excess
capacity could raise rates.

Of course the downside is less independent players mean shipping prices could
rise for non competitive ports

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tropo
The shipbreaking process is pretty strange. It's really labor-intensive. It
looks dangerous. It looks like large chunks could even get lost in the beach.
Does the company even legitimately own the beach?

Of course, due to labor cost and environmental law and so many other things,
we can't replicate that method in a first-world nation. I wonder if we could
automate it. I think the ships are mostly just going to be melted down. That
should be easy: put a dry dock next to a really big furnace that can consume
the whole ship in one go. NOM NOM NOM!

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OliverJones
Atlantic magazine ran some photos of this process.
[http://www.theatlantic.com/photo/2014/11/the-ship-
breakers/1...](http://www.theatlantic.com/photo/2014/11/the-ship-
breakers/100859/)

It's amazing what sorts of things can happen when strong, dedicated, and
intelligent people will work for 250 rupees per day and be happy about it.

To me the amazing thing about this article is that owners can afford to scrap
their ships after only a couple of decades in service. I guess nothing's built
to last.

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mannykannot
It is not so much that they can afford to scrap them as it is that they cannot
afford to keep them (though I assume they knew this was coming when they built
them.)

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sounds
There have been some articles suggesting that shipping contracts (especially
futures) are an economic indicator that still leads the market.

Scrapping your capacity could be taken as an indicator as well.

~~~
dnautics
I agree in general but this is occurring to generate resources for bigger
ships, so not knowing the numbers, there is a possibility the net capacity may
be balanced or even grow.

Panamax is an "artificially constrained" size class

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tomc1985
Interesting. Though it seems odd to scrap them when there are still two
perfectly-workable shipping lanes that they'll fit through

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CapitalistCartr
The operating cost per TEU is inversely proportional to ship size. New
container ships are 17, 18, 19 thousand TEU behemoths. Even the New Panamax
ships are 13,000 TEU.

~~~
JacobAldridge
Thanks for adding that detail - the size of the New Panamax ships was one
piece of information missing from the article that would have helped with
perspective.

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bogomipz
Can someone explain the correlation between the new Panama Canal coming online
and the need to scrap ships?

For an eye opener into the horrid industry of ship scapping google "Chitagong
Ship Breaking." Basically they hall them into a ship yard in Bangladesh and
pay people peanuts to risk their lives dismantling this tonnage by hand.
People die all the time. Its a disaster in many different ways. It's
everything that's bad about globalization.

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thebakeshow
The Panama Canal re-opening will allow larger ships to pass through. The
larger ships are much more cost effective, and now that they will be able to
traverse the canal, the small-ish ships are being decommissioned.

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emailgregn
Are the newer ships more environmentally friendly? I'd assume only slightly
because they're still burning bunker oil, only slightly more efficiently.
Which I find perverse given the attention focused on car pollution.

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lmm
Much more, yes - modern ships have been built slower, with lover rev-engines,
to save fuel. And a larger ship is inherently more environmentally friendly.
And even the oldest ships do far, far less environmental damage per kilogram
per kilometer than cars or other road transport. Not to mention that the
issues with nitrogen oxide emissions in particular (the focus of the recent
scandal) are less about environmental damage and more about the danger to
humans from breathing them in, which is obviously a lot more important when
emissions are happening in the middle of a city rather than out on the open
sea.

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touristtam
I wonder how much effort it would take to require operator of those sea
monsters to get them dismantled in dry docks.

