
First big containerships en route to the Panama Canal - protomyth
http://theloadstar.co.uk/first-big-containerships-en-route-panama-canal-leaving-workhorse-vessels-bow/
======
vlehto
For anybody interested in geopolitics: the new canal is big enough for Nimitz
and Ford class carriers. Cutting travel time from NY to LA from 17 days to 7
days.

NY to Taiwan strait is now only ~14 days, previously ~20 days and LA Taiwan
strait remains ~8 days. LA - Israel travel times from 18 days to 11, from NY
about 7 days.

This has relatively little to do with "power projection" as carrier battle
group is lot more likely to use the Suez canal in such situations. But for
U.S. defense this is significant. Now nobody can start crossing the pacific
with evil thoughts without taking into account every carrier battle group in
Pacific _and_ _Atlantic_. And if you embark from Barents sea, you have to take
into account anything floating around Hawaii or closer.

~~~
relix
Is it easy to sabotage the canal while the battle groups are traversing it,
effectively trapping them inside? Would they take that risk?

~~~
vlehto
The alternative is not that much better, Drake passage at the tip of south
America is stormy and "only" 1000km across and very stormy. This makes it very
difficult for carrier to safely operate aircraft. Which makes it difficult to
out range threats. So they pass though stairs of Magellan. Which in turn makes
surprise attack with container missile more of a threat. You could fire it
from container parked at Punta Arenas. [http://thumbs.dreamstime.com/z/club-k-
container-missile-syst...](http://thumbs.dreamstime.com/z/club-k-container-
missile-system-26146327.jpg)

Here is Nimitz at suez channel:
[http://web.mst.edu/~rogersda/military_service/Carrier%20in%2...](http://web.mst.edu/~rogersda/military_service/Carrier%20in%20Suez%20Canal.jpg)
and here in Magellan strait:
[https://commons.wikimedia.org/wiki/File:US_Navy_040621-N-653...](https://commons.wikimedia.org/wiki/File:US_Navy_040621-N-6536T-066_The_Nimitz-
class_aircraft_carrier_USS_Ronald_Reagan_\(CVN_76\)_cruises_through_the_Straits_of_Magellan.jpg)

Edit: added the word "stormy". Drake passage is mean
business.[https://cnet4.cbsistatic.com/hub/i/r/2008/03/04/e9944d14-f4d...](https://cnet4.cbsistatic.com/hub/i/r/2008/03/04/e9944d14-f4d6-11e2-8c7c-d4ae52e62bcc/resize/570xauto/df581edfcc2b8edf0d0248c45f1cc62f/3t_global_wind.jpg)

~~~
jessriedel
Do the really go through the straits of Magellan that often? They did it for
the first time only in 2004.
[http://www.navy.mil/submit/display.asp?story_id=13939](http://www.navy.mil/submit/display.asp?story_id=13939)

------
Isamu
Some context (2014) [http://www.mckinsey.com/business-functions/strategy-and-
corp...](http://www.mckinsey.com/business-functions/strategy-and-corporate-
finance/our-insights/the-hidden-opportunity-in-container-shipping)

The industry’s bleak economics

Transport is often seen as the harbinger of the broader economy. It certainly
fulfilled that role in the recent economic crisis, as business fell off
precipitously. However, shipping is now also a kind of lagging indicator: its
performance is trailing the broader, somewhat erratic global recovery.

A big part of the problem is that the industry continues to add capacity. By
2015, the typical vessel delivered will handle about 10,000 20-foot equivalent
units (TEU), five times more than ships built in the 1990s. Not surprisingly,
pressure to fill this capacity and capture the efficiency benefits of larger
vessels has led to hasty decisions by carriers. In turn, profits have become
exceptionally volatile. Record losses in 2009 were followed by strong profits
in 2010―and significant losses again in 2011.

The supply/demand imbalance, the larger vessels that will only make the
imbalance worse, and the volatility of profits are significant problems.
However we argue that they are in fact symptoms of these deeper challenges:

The market is saturated, and the industry is now in a race for market share.
The quest to take share is squeezing out smaller players and has started
another wave of price wars. Shipping companies are forsaking their guidelines
on pricing, both in spot rates and general rate increases, and choosing not to
enforce contracts with customers.

Companies are pricing at their marginal cost. That’s not necessarily bad; in
fact, it’s the right decision for many. But for others it is irrational, and
when everyone does it, the industry suffers. Many shipping companies have
ineffective cost-management systems.

~~~
kyllo
I used to work at a major container carrier and they actually had a pretty
good handle on their operating costs (it's not hard when you only sell one
thing), their problem was insane capital expenditures. When China joined the
WTO in 2002 they bet big on the upward trend in demand continuing
indefinitely, and when the economy crashed in 2008 they were left with a huge
order book of new vessels they no longer needed. They still haven't recovered
from that.

------
vermontdevil
I thought this was more interesting, using miniature models such as tiny ships
for training

[http://theloadstar.co.uk/panamas-model-for-success-as-
pilots...](http://theloadstar.co.uk/panamas-model-for-success-as-pilots-use-
tiny-ships-to-practise/)

~~~
op00to
I want to ride that adorable little boat around all day.

~~~
Aelinsaar
The temptation to say "Toot toot!" and giggle like and idiot would be very
strong.

------
gggggggg
Am I reading this right. I could HIRE a container ship for $5500 a day? A
whole ship! Does not seem right to me, crew costs would have to be more than
that.

> Indeed, according to Alphaliner, there are about 40 panamax container
> vessels currently seeking employment on the spot market against an
> unfavourable backdrop of oversupply. It said that charter rates remained
> “stuck at rock-bottom levels” – typically at about just $5,000-$5,500 a day

~~~
walrus01
Calling Peter Thiel, if there's about to be a glut of unwanted "old Panamax"
container ships on the market for charter, maybe some will be for sale? Buy a
few, strap them together and put them 13 miles off the coast of SF. What can
possibly go wrong?

~~~
ubernostrum
_13 miles off the coast of SF. What can possibly go wrong?_

13mi offshore? What can go wrong is you're still in US territorial waters;
they end ~4,200 feet further out, because territorial waters are defined in
nautical miles.

But even if you amend to "13 nautical miles off the coast", you run into "Hi,
you're still in our exclusive economic zone." To get out of _that_ and truly
be free of both territorial and economic-exploitation claims of existing
states, you need to be more than 200nm from any coast. Which is ~230mi and a
bit more of a hassle to commute to, supply, etc., not to mention you'd need to
build a stable anchorage for them and all the natural ones are, well, within
the territorial waters or exclusive economic zones of existing states.

~~~
colanderman
I believe it was a reference to Neil Stephenson's novel "Snow Crash".

------
jedberg
I understood about 1/2 the phrases in this article. Can someone who is
familiar with shipping terms tell me what Panamax strings are?

~~~
niftich
A string is just a multi-hop service/route, like Hong Kong -> Panama -> New
York -> Norfolk -> Savannah -> Panama -> Hong Kong. Somewhat like a 'flight'
for airlines.

From 'Dictionary of Shipping Terms' by Peter Brodie [1]:

String:

> Service offered by a shipping line involving several vessels performing
> outward and return voyages between ports in two distinct geographic or
> commercial areas. Also referred to as a 'service string' or 'string of
> vessels'

[1] [https://books.google.com/books?id=sRqk-
NfgEY0C](https://books.google.com/books?id=sRqk-NfgEY0C)

~~~
bahmboo
Just a nit, but extremely unlikely they would stop in 2 US ports due to Jones
act:

"requires that all goods transported by water between U.S. ports be carried on
U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and
crewed by U.S. citizens and U.S. permanent residents."

Not a lot of those so US port to port is run a bit different. Basically Hawaii
and Alaska.

~~~
niftich
But they do, and some specifically offer US flag vessels on certain routes.
However, like you said, the Jones Act only applies to US-to-US shipments,
whereas most cargo is coming and going from overseas -- so it's typically a
non-issue.

Here's some actual schedules showing real routes calling at multiple US ports:

[1] [http://www.cosco-usa.com/fpdb/Services/schedules.aspx](http://www.cosco-
usa.com/fpdb/Services/schedules.aspx) [2] PDF: [http://www.hamburgsud-
line.com/hsdg/media/hamburgsd/document...](http://www.hamburgsud-
line.com/hsdg/media/hamburgsd/documents_1/regionalinformation/northamerica/usa/news/2014_2/FirstSpirit_1418156439859Hamburg_Suds_new_Asia-
US_service.pdf) [3] PDF:
[https://www.msc.com/getattachment/dfebb208-935e-4060-b0c7-a5...](https://www.msc.com/getattachment/dfebb208-935e-4060-b0c7-a514efd1cfdd)

~~~
thomasthomas
used to work for a container shipper, there is absolutely zero intra-US
transportation via container vessels. The multiple US port calls in a string
such as NY - NFK - SAV are discharge - discharge - load or something of the
variant. its not picking up containers at NY and discharging same containers
in SAV.

besides, I can't think of any use-cases where container shipping within US
would be sensible. US company supply chains aren't designed in a way where
procurement activities are dispersed and could benefit from intra-US container
shipping. unless someone can think of a company?

another note: IIRC theres a lot of traffic that discharges at LA and rails to
HOU. even with the expanded canal, this is the most cost efficient way to get
cargo from asia to houston. trans-pacific vessels are > 10k TEU so if a
supplier wanted to go through panama canal, you'd have to use smaller trans-
pacific vessel which would raise shippers unit cost thus raising the suppliers
cost. if you're a company that relies heavily on asian imports, your
facilities are typically located on the west coast to avoid extra
transportation cost anyway.

i don't think this news is that impactful

------
WildUtah
I'm confused. The article implies that 'westbound' ships are headed the
opposite direction of ships headed for New York. But ships traverse the Panama
Canal from east to west on the way from Asia to New York.

Is there a convention of calling ships that cross Panama from southeast to
northwest 'eastbound' and ships that traverse from northwest to southeast
'westbound?' Because that seems like it would be even more confusing that
things already are.

~~~
niftich
They're referring to global (i.e. shipping) geography with regard to east-
west, not local geography.

The convention is actually to call the Atlantic side 'north' and the Pacific
side 'south'.

~~~
alienasa
Because it is actually 'north' and 'south'. Somewhat unexpectedly, the
Atlantic exit of the canal is actually _west_ of the Pacific exit.

