railandsail

I have a major concern about how shipping cast from overseas is going to affect both the prices of our model railroad items,...AND their availability.

I recall seeing a posting that talked about the huge increase in container freight coming in from China, but I can't find it now. Those container shipping rates have to be a big increase in our hobby supplies coming in from international shipping (as well as lots of other items), but we are talking RR items here.

And currently we have something like 80 container ships waiting to unload at our west coast ports.

Plus what is happening  with the current manufacturing of our model trains in China. Wasn't there a big shake up with the death of a prominent Chinese businessman who controlled a lot of these businesses? What happens to anyone wishing to get their products built over in that cheaper labor market,..where does he/she find a viable manufacturer??

Brian

1) First Ideas: Help Designing Dbl-Deck Plan in Dedicated Shed
2) Next Idea: Another Interesting Trackplan to Consider
3) Final Plan: Trans-Continental Connector

Reply 0
MikeHughes

Is part of the issue less trucks in California?

More emission regulations in Cali, less trucks.  I've read that no tractor earlier than 2015 is allowed to enter the State.  If that is true, it must create a serious issue.

Less trucks, less capacity to remove backlogs at ports

It will take time to realign ports away from Cali.  That state seems to be putting a chokehold on US supply chains.

Tesla quote's range of these as 300 miles.  Tesla Semi Tractor

Is this enought o get from Port of LA to Nevada Border?  Are there large recharging stations there?  It does not appear that this is available yet. 

 

 

Reply 0
Michael Rozeboom

Shipping costs

Don't get too concerned. If there is only one thing in the container, yes, it will get expensive to move it. But that is only part of the cost of getting it into your hands.

Since a container could hold thousands of small items, the increase is spread over thousands instead of only a few units. So the cost per unit may only increase 25 cents.

Finding a supplier or partner in China isn't a problem. Finding one that will not cheat you is the problem. So you need an agent in China to look out for your interests.

 

Reply 0
railandsail

Found this older subject

Found this older subject thread,.. The Current Supply Chain Problem

and extracted this one particular posting,  https://forum.mrhmag.com/post/the-current-supply-chain-problem-with-several-manufacturers-12210489

Quote:

We have been sitting on pins and needles for the last four months waiting for progress on our B&O I-5/1/2/3 project.   A couple of days ago, we learned that the factory we used in China has shut down.  This closure was an unanticipated and sudden announcement.  We have made contact with other factories and are actively evaluating options to get our announced projects here as soon as practical.  All of our projects are marked as TBD.  Getting a new factory proficient enough to produce the quality of models that our customers have become accustomed to will take some time.  Additionally, this may alter the order in which they arrive vs when they were announced but we are committed to get them here.  We can’t let a simple factory shutdown get in our way!
Spring Mills Depot

That was just one  importer in the US. 

Reply 0
railandsail

 This article reference

This article reference covered the situation more broadly,
https://thebusinessofmodels.wordpress.com/2015/03/27/hornby-paid-0-5m-to-end-its-chinese-supplier-misery/

Quote:
Quote:

A couple of years ago, Sanda Kan was purchased by Kader Holdings (the Chinese company that owns Bachmann Trains). Sanda Kan was the largest supplier of model trains in the world, and most of the trains made by North American and European manufacturers came out of Sanda Kan’s many factories in Guangdong province, China.

Quote:

After initially telling their clients that nothing would change, Kader decided to dump the vast majority of their customers. Suddenly, about 50 model train companies around the world had no factory to produce their models. As you can expect, a form of panic ensued as everyone was scrambling to find a supplier.

Reply 0
Russ Bellinis

Right now the problem is not lack of trucks.

It is the lack of drivers and slow loading and checkout procedures at the terminals.  When I worked in the harbor back in the 1980's most of the drivers picking up "cans" in the harbor were owner operators.  The cost of the trucks and their maintenance was no less for an owner operator pulling "cans" out of the harbor than any other hauling job an owner operator could get.  There was also no other job an owner operator could get that would pay less than hauling containers out of the harbor!  I've never seen trucks in worse repair!  Typically at the terminal where I worked as a mechanic, we had one mechanic who spent almost all day just jump starting trucks.  After one mechanic was killed when a driver pulled a chassis out of the chassis yard and ran over and killed a mechanic who was underneath checking and adjusting the brakes, the requirement was that no mechanic would look at anything until the truck engine was shut down.  Most then needed a jump start to get them going again.

None of the owner operators serving the Los Angeles/ Long Beach harbors could afford to buy a new truck.  Most of the owner operators were Latino or black.  Guess who died from covid most often?  Here in California, the Latino and the black communities suffered more deaths than anyone else during the pandemic.  The result is that there are not enough drivers to move the cargo.  In addition the trucks line up at the terminals to pick up containers and need to wait on average 3-4 hours to get their load and get out.  They are paid by the load.  If they only get 2 loads per day, they won't make enough to pay bills.

 

Reply 0
Jackh

Brian

It would be interesting to have the dates of what you quoted.

I saw a short video yesterday about China and manufacturing. It seems there are 2 issues at the moment or at least 2 that are admitted to.

1 is that the CCP is putting pressure on manufacturing to cut back on business with the US and (2) the US is seen as being to hard to work with. Maybe because of all that intricate detail work? We are too demanding and not flexible enough.

Jack

Reply 0
jeffshultz

111 ships

I understand from a report today that there are 111 ships off the LA/Long Beach ports.

Makes me wonder why (or if it would make sense to) they haven't sent more to Portland. Last I heard, it's Port facilities were very underutilized.

For that matter, how are things doing in Prince Rupert and Seattle/Tacoma?

Pretty soon it ought to level out - there won't be any more ships to fill in China, they'll all be sitting off SoCal.

orange70.jpg
Jeff Shultz - MRH Technical Assistant
DCC Features Matrix/My blog index
Modeling a fictional GWI shortline combining three separate areas into one freelance-ish railroad.

Reply 0
Ted Becker rail.bird

Seattle/Tacoma

https://www.marinetraffic.com/en/ais/home/centerx:-122.337/centery:47.580/zoom:15

The marine traffic site shows three ships docked at the container port in Seattle which has the capacity of 6 or 7 ships.  Tacoma shows four ships docked.  Not sure of the capacity there but I would guess eight or so.

Traffic in Puget Sound does not seem particularly heavy nor does there seem to be a backlog off shore.

Capacity at Seattle/Tacoma combined is way less than the capacity at LA but it does seem a little of the pressure could be relieved by routing through here.  Two good rail connections, BNSF headed east and UP headed south.

Interesting note:  I order custom printed circuit boards from China occasionally.  The shipping rates for small package, economy airmail shipping has dropped.  Orders that cost $12 to ship 18 months ago now ship for less than $5.


Ted Becker

Granite Falls, WA

Reply 0
Neal M

Some of Brian's articles...

It looks like one article is close to 7 years old and times have changed. Container costs have gone thru the roof. Getting truckers to pick up from ANY port in the US is tough to do these days. 

One thing I do know is that some manufacturers, depending on what they bring in, use space on scheduled air freight. Airlines want to maximize fuel consumption and don't want to fly light, so many small manufacturers will book space in advance.

More important is this situation is not unique to our hobby, it's anything and everything. Some companies are bringing containers around the Panama Canal to the East Coast. 

Our hobby is not a necessity, it's a luxury and unless you're a Walmart, Target, Amazon or large customer, you're not getting priority on ships. This I know as fact. Containers are booked out months in advance. I would take orders for holiday first week of May for delivery to the port in China by August so it would arrive by September. It's all planned out. 

Despite the pandemic, many larger customers have their goods in the US. May not be on the shelves today, but they have it. One of my factories planned early and my customer has their holiday toys. 

If we don't get today, there's always tomorrow. We just need a little patience in our hobby.....

Neal

 

Reply 0
john holt

Shipping Imbalance

 The US imports more now than it exports.  So, we now have a large supply of empty containers here in the US and no place to put them. After a container is empty it is not reloaded directly on an outgoing ship but is stored and they have no more storage space at the docks. So containers are put right back on trailers and trucking companies have to haul them off. If a trucking outfit has room and the ways and means required to unload an empty container, they can store that container on their property/lot until the port will let them return it. Then that trailer is free to go back to the port and haul another  full container to its destination. Otherwise, a trailer, with an empty container load just sits  in an owners yard and this trailer is now "out of service" to haul anything. Some trucking outfits don't have the storage space or ways and means to unload containers so that truck/trailer can't be used. It is not so much a driver shortage as a truck/trailer shortage caused by too many empty containers in the US.

 After a container hits the ports it is loaded on a truck and headed anywhere in the US depending on its load. When it is empty it is loaded on a trailer to be returned to the port to be shipped back to it destination. But the ports are not taking the returning empty containers , again, due to lack of storage space.

  Unloading is now hindered due to so many empty containers stacked everywhere at the ports. And the shortage of empty trailers now hinders the shipping/distribution of goods in full containers from the ports. So now we have ships parked offshore waiting to unload.

  Shippers, whos goods are in certain containers, are now paying off others a premium price to have their containers unloaded ahead of other containers thus increasing shipping prices handed right down to the consumer. Plus fuel costs in California have increased considerably.

  This info was provided by a trucking company owner who has been in the trucking business and working the ports for over 35 years. He says he has about 30 drivers and most of them have worked for him 20 years  or more.

   There is also some speculation that shipping/receiving practices in China have been tweaked a bit to exaggerate the problem we now have in the US.

Reply 0
AlexW

Trucker shortage is self-induced

In 1980, the average trucker made, what is today over $110k/year. Now they make about $45k/year. Deregulation and a race to the bottom created this problem. Wal-Mart, UPS and other operators who have their own employees making $80k/year with benefits don't have nearly as much of a problem finding drivers.

I can guarantee that if trucking jobs paid $45/hr plus time and a half OT with good benefits, we wouldn't have a "trucker shortage". Companies are still in a race to the bottom and wonder why gazillions of dollars worth of their stuff is stuck and can't move around.

Now the ports, that's another story. They have their own sets of issues, but if they didn't have the "trucker shortage", it wouldn't be nearly as bad.

-----

Modeling the modern era freelanced G&W Connecticut Northern

Reply 0
railandsail

So I guess its cheaper for

So I guess its cheaper for the Chinese to just build new containers than worry about getting the others returned,...wow.,...wonder what burden that is on their steel industry. And the Chinese don't even accept a lot of our recycled goods any longer.

Reply 0
john holt

trucker shortage

Lets look at new truck prices. They are thru the roof. With more EPA regs, truck prices have been driven up. A driver now has to figure the costs of DEF in with fuel costs. Some truck mfg now will void the owners warrenty if the dealership does NOT do the repairs.

it is also my understanding that laws and regulations will change after Feb 1st of next year and if anyone is planning on getting a CDL, they need to do it before Feb 1, 2022.

New laws in California will put most if not all independent drivers out of business there. Oddly, these new laws (regulations) will not apply to big companies like WalMart, Amazon and so on.

Then there is the practice of State Police now coming into rest stops and calling out truckers for a safety inspection. A driver pulls into a rest stop for rest, not being bothered by State Police officer. Those safety inspections are usually done at weigh stations and I have no problems with keeping trucks safe, but there is a time and place for all things.

With the info I have posted above , how many people are jumping up and down to enter the trucking industry?

No wonder we are seeing less truckers. Unfortunately, these are signs of the times and I doubt' they wil get better.

Nine words you never want to hear.." I am with the government and I'm here to help"

Reply 0
railandsail

MTH demise

I wonder if Mike Wolf could see the writing on the wall when he decided to get out of the business of model trains??

Reply 0
eastwind

Port congestion economics

Because economics is something of a second hobby for me, I've been reading everything I can lay my hands on related to this subject. There's a lot of finger pointing going on. Most likely it's a combination of the factors. I'm going to try and list the ones that I've seen mentioned:

- California Truck Regulations. California specified a few years back that as of this year trucks operating in the state had to be the newer diesels that use that DEF additive. Lots of older trucks got forced off the roads or out of state. This was one of those "seen it coming" things. Several major importers did see it coming and have rerouted their imports to other non-california ports over the past two years. 

- California Port inefficiency. I saw an article blaming the longshoremen union. Blaming them for resisting every moderization and automation effort. Saying that US ports in general and california ports in particular are far less efficient than they could be, as demostrated by some very efficient ports in Asia, such as Singapore and Korea. The article had various statistics and measurements of time a container stays in the port area.

- California Port management. Apart from the above, the scheduling system for pickups and drop offs is terrible, with truckers having to wait hours in queue because the port doesn't give them an assured tight delivery window. A truck that simply runs between the port and a local warehouse, dropping off empties at the port and picking up a full container to take back to the warehouse, may spend all day and get only 2 round trips done, with 7 of the 8 hours spent waiting in queues at the port.

- Lack of chassis. The chassis is what they call the wheels part that the container is loaded onto. To me, this seems to be a knock-on problem, a secondary effect not a primary cause. There are apparently a lot of chassis loaded with containers parked in the neighborhoods around the ports. My assumption is that these are mostly empty containers because it would be a risk to leave a container with cargo unguarded. Truckers have all sorts of regulations governing the number of hours they can work, mandatory breaks, logs they have to keep to prove they haven't violated the rules, etc. I believe these apply to short-haul as well as interstate drivers. So my guess is that the reason a lot of these chasis+empties have been abandoned near the ports is because of the long queues to drop them off properly, and the truckers ran out of hours and so they just dumped them and drove the tractor home.

- Lack of truckers (#1). California passed that anti-Uber law that originally sought to force Uber and Lyft to treat all the drivers as employees. Then an exception got added that let Uber and Lyft off the hook. But it still applies to lots of other 'gig' workers, including independent truckers. So people saying that a lack of drivers is part of the problem are pointing to that saying that the law caused a lot of independent drivers to switch jobs or move out of state.

- Lack of truckers (#2). The Biden vaccine mandate for companies with 100 or more employees applies to truckers. That has been blamed for truckers quitting. I read that OSHA had added an exemption for truckers that drive solo (most of them) so this problem should be now corrected, except for the damage already done.

- Lack of truckers (#3). Even before California's anti-gig law and Biden's vaccine mandate, there was a lack of truckers. In particular, many of the independents who used to live at home and do short trips between the local warehouses and the ports had apparently given up because while a paid-per-hour employee of a larger company can get paid to wait in line, an independent owner/operator makes no money waiting in line and has fixed costs. There was also a lack of long-haul truckers, and wages for them had gone up substantially. So some of the drivers that used to do port runs (and especially those with older rigs that don't consume DEF) moved out of state to do trucking elsewhere.

- Lack of warehouse workers. The containers mostly are delivered to a warehouse where they get unloaded and their contents reloaded into a number of other containers bound for different directions. Thus a container full of nothing but one particular model of air conditioner might be split up into 20 or more containers each of which is bound for a different Home Depot, and another container full of shop vacs would get split up likewise until all the Home Depot containers are mostly full of mixed goods, then they go out each to their own destination. So the containers get unloaded and reloaded in transfer warehouses. Those may be near the port or a long way away, it doesn't matter, most containers need to get split up and reloaded somewhere. And the workers to do those jobs got laid off when trade cratered during covid and the warehouses have been having trouble replacing them.

- Lack of ships to pick up empties. Another part of the problem was said to be a huge surplus of empty containers in and around the ports. Some of the following explanation is guesswork on my part and may be incorrect. Normally a ship that comes in full should fill up with empties on the way back to Asia rather than sail home with an empty deck. The empties don't generate a lot of revenue, but they generate some and something is better than nothing. So for this to have become a problem a lot of ships must have sailed home with empty decks. My suspicion is this is really a symptom of the ports being backlogged. I believe that there are separate queues and cranes for loading and unloading, so a ship, like a container chassis truck, has to wait in one line to unload and then wait in a second line to load. If the line for loading empties is long enough, at some point the revenue from the empties is going to be less than the cost of the wait time and the ship will sail with an empty deck instead. So that might be how the imbalance of containers developed (too many empties on the west coast of the US, too few empties available in Asia).

- Lack of longshoremen. I think somebody was trying to deflect blame from the ports by saying they couldn't hire enough longshoremen. I don't really understand how this works with the longshoremen's union, I thought they supplied the workers. Maybe they're not recruiting enough new members?

- Other ports. Some people have pointed out that other ports (I think Savannah GA was mentioned) are also backed up. Yet on the other hand, I think the Florida governor was saying "send your stuff here, we've got port capacity available". Nobody said anything about the panama canal being more of a bottleneck than usual.

- Just in Time. Over the last 30 years, the people whose job it is to squeeze any and every inefficiency out of the supply chain have beavered away and the result was a very very efficient supply chain with very very little excess capacity at any point. The result was also a very fragile supply chain. Yet in spite of all the optimization to the rest of the supply chain, the ports have escaped modernization and improvement and were operating very inefficiently (at least compared to what they might be). Now that the system has broken down, with bulges and air pockets everywhere, it's going to take a long time to get the bulges ironed out into the air pockets. To some extent, this was all a disaster waiting to happen. 

So there might be other things that have been blamed that I can't think of right now. I'll add more later if they come to me in another post or if someone else mentions them. At a high level, some were predictable (and it's said that Amazon and a couple other big retailers did predict them and adjusted their supply chains ahead of time) and some were not. Some were due to covid, and some were due to the government's response to covid. 

While government is definitely not the full cause of the problem, it is part of the problem. And it seems to me that California and the federal government have not done much to reduce the issues they've created. Writing an exemption to the vax rule for truckers is helpful - but the vax mandate has already been put on indefinite hold by the 5th circuit court, anyway, and it's too late now to get the truckers who switched jobs to come back. California could push back its regulations that have taken trucks off the road. Just another 2 years would help a lot. Another 5 years of non-DEF trucks would not cause the oceans to rise. For the longer term, the longshoremen could and must agree to more automation. The port operators don't want to run the ports 24x7 because that forces them to pay longshoremen overtime (it's apparently possible to make 120k a year as a longshoreman if you have the seniority and play the game right). The ports don't, but should, operate like clockwork. A driver should have a delivery window that's short, not hours long. They shouldn't have to sit in line for hours, that's inefficient (and polluting - those trucks are idling, for hours).

There are apparently quite a few 'best practices' that we have not adopted in the US. It would be helpful for the people in charge to leave off finger pointing and work to fix the problems. There's plenty of blame to go around.

You can call me EW. Here's my blog index

Reply 0
DirtyD79

GO GO GODZILLA!

Pretty sure Godzilla ate a few of the containers too.

"The good ole days weren't always good, and tomorrow ain't as bad as it seems."-Billy Joel
Reply 0
Russ Bellinis

The way a container ship is loaded/unloaded.

There are no separate cues shipside except if there is more than one crane working a ship.  For moving containers around the yard, or loading or unloading trucks, top handlers can move empties or loads, but are slow compared to transtainers (straddle cranes).  Side handlers handle empties only.  

Refrigerated containers with perishable loads are typically put on the "reefer pad" on the deck where they can be easily plugged in without forcing a mechanic to climb 2 or 3 containers high.  Those going out on a ship will be unplugged and moved to a stack where they will be loaded on a ship within a few hours.

Most refrigerated containers will be put on deck typically stacked no more than 2 high loaded.  Empty reefers will typically be stacked on deck above the first 2 rows.  Some loaded containers or reefers with dry loads may be stacked above the first 2 rows up to 4 high.  It is preferred to stack empty containers on the top rows on deck to keep the ship from becoming top heavy and risk capsizing in rough seas.

Every hold on the ship has a hatch cover.  These hatch covers are typically 90 feet long (allows two long refrigerated containers to be loaded back to back).  The refrigeration units are always facing an open space between hatch covers to allow max airflow through the condensers.  The hatch covers are the full width of the ship less 3-4 feet on each side to allow space for longshore or ships personnel to walk the full length of the ship without needing to climb over obstructions.

When they start to unload the ship, every crane will clear 2 adjacent hatches of containers.  This is because the hatch covers are unlocked, lifted and one hatch cover is stacked on top of the adjacent one.  The crane operator then starts unloading the hold be removing one container at a time until one stack is empty all the way to the bottom of the hold.  When I worked in the harbor the typical ship we worked had containers stacked 9 deep in the hold and 4-5 high on deck.  After the crane operator has unloaded those first 9 containers so that he has an empty stack available, then he proceeds to load one/take one.  He takes a loaded container off the dock or "bomb cart" under the crane and puts it in the empty stack, then moves the crane to pick up a container to off load onto the "bomb cart".  Bomb carts are special chassis that are built with 1/2 inch steel plate.  They are as heavy empty as a loaded container.  They have guides at each corner designed to slide a container into position  and hold them in place while moving from under the crane to where ever in the yard the container is to be put down until delivered.  The bomb carts are designed so that the crane operator doesn't need to spend a lot of time doing precise alignment thus slowing the unloading/loading of a ship.  Also the bomb carts are heavy duty enough that they can stand a lot of abuse from loads being put on hard.  The crane operator is over 100 feet above the truck he is loading/unloading, so he is not going to set the containers down gently!

The person planning the loading of the ship has to balance the ship by weight, by putting hazardous loads where they are safest, and by destination.  When a ship comes into Long Beach Harbor for instance, any hold or hatch that is unloaded will have 100% of the containers destined for Long Beach.  They don't unload a container in Long Beach and then put it back on because it is destined for Oakland.  Likewise a hold & hatch will not have some loads for say Kobe, Japan and other loads for Hong Kong. 

There is absolutely no favoritism for loads for certain customers over other customers.  Loading a ship or unloading a ship is complicated enough without introducing some sort of artificial favoritism.

A large container ship may come into Long Beach with 2500 containers on board.  Perhaps 1200 are destined for Long Beach.  Long Beach containers would include all containers the would come ashore in Long Beach.  It doesn't matter the final destination.   If the cargo is destined for Phoenix, or Albuquerque, it still comes off in Long Beach, so as far as the shipping company is concerned it is a Long Beach load.  All of the l Long Beach loads will be together on the ship, and nothing for some other port will be stacked with Long Beach loads.

Typically, when a ship ties up to the dock in a port, it will be unloaded and reloaded with in 16 to 24 hours and then on it's way to the next port.

The problem with rerouting ships to different ports that are not as busy is that cargo destined for Long Beach or Los Angeles that was unloaded in Seattle would need to be transported by truck or train from Seattle, and someone has to pay for that extra shipping.  This would be further complicated by the need for every customer of every container on that ship that is destined for So. Cal. to agree to pay an additional charge to trans ship their container from Seattle to Long Beach or Los Angeles.  

Reply 0
john holt

Economics /our hobby

@ EW.......Thanks for your time in giving a broader description of our shipping dilemma. You stated :

    While government is definitely not the full cause of the problem, it is part of the problem.

  I believe most all the problems we as American have been experiencing since the start of 2021 have been government  aided. High gas prices, food shortages, higher prices and open boarders are not things that help our nation grow. You have to admit when the other political party was in power from 2016 till 2020, our economy was doing very well. Now, that is not the case and it is obvious why.

@ Brian....I wonder if Mike Wolf could see the writing on the wall when he decided to get out of the business of model trains??

   Unfortunately, I believe we will see some smaller, "cottage type" model railroad companies go out of business due to the economic stress put on them. But I believe some will survive simply because the owners need that extra income from their small business to live. This is any ones guess.

    Here lately I wake up wondering should I go and work on my train layout or should I start listing my model train inventory in preparation for a giant sale and hunker down for coming events.  If things in the US start going like things in Australia, running model trains will become most likely your least concern. Australia has become ground zero for the Global Socialist/Marxist movement, you know, the one world government group.

If you don't know, understand or believe there exist such a group, I suggest you research Agenda 2030. You can find info on the interweb.

A quote from  : The New American
P.O. Box 8040,
Appleton, WI 54912........... 

Agenda 2030, touted as a solution to everything from poverty to global warming, is really a plan to empower a global governing body.

  While this is a model railroading forum and not a place to air out political viewpoints, I think it is important to spread news and information to others you care about. I would hate to know someone suffered or was caught off guard because I choose not to pass on vital info that may have eased or prevented a problem.  I suggest everyone who reads this to do your "due diligence" in research about whats coming and draw you own conclusions. Each one of us, at least for a while, have the freedom to make up our own minds and have our own opinions. This info is not intended as a "Doom & Gloom" message, just a heads up to others.

  As a man once said..."I am the type of person the government dislikes because I like to do my own thinking"

Reply 0
JDLX

Other factors

Eastwind seems to have addressed many of the issues currently crippling the supply chains, but a lot of them are symptoms or compounding factors.  Some others that come to mind:

1.  Most of the issues stem almost entirely from one factor, unprecedented consumer demand in the US and dramatic changes in how people are buying.  A lot of consumers have been plowing money that otherwise would have been spent on dining out or travels into buying goods, almost all of that over the internet.  I've heard of at least a couple hobby shops that survive mostly on mail order business that have reported their best sales years ever over the last year, indicating that our hobby has in fact benefited from this trend.  The absolute crush of imports trying to feed the current demand and stay ahead of anticipated future demand are resulting in an enormous flow of good trying to be shoved through a supply and distribution network that is simply not built to handle that level of business.  Somebody the NPR program Marketplace interviewed in the last day or two said we've compressed about five years of e-commerce development into the past year.  Add all of the ripple effects from the hiccups at the beginning of the pandemic to that and you get the situation we have.  

2.  Meeting the current and anticipated demands have caused US importers to order a whole lot more stuff from Chinese factories, resulting in a crush of exports piling up at Chinese ports.  Hauling those containers to the US is where the shipping companies make their money, there is little to no revenue or economic incentives for them to carry empty containers on the return voyage, so many of the ships are heading back empty so they can get loaded with revenue boxes that much quicker.  Hence empty containers pile up at west coast ports because few to no ships are willing to take the time to load them up before heading back west.  The skyrocketing costs of container space are in large part due to the extreme shortage of empty containers in China and simple supply and demand economics.  

3.  Related to (2) is that there are large sectors of the U.S. economy, especially agriculture, that have traditionally used empty containers going west to export products to Asia.  Those have dropped precipitously as those shipping companies that are taking boxes back to Asia want them to be empty so that they can get turned with the more profitable business that much quicker.  This has significantly cut into US export business and is having a crippling effect on some businesses and drives the trade imbalance.  

4.  Lastly, much has been made of excess capacity at other ports and wondering why some of the ships don't divert to them.  The answer to that is simple, almost all of the import distribution networks for products coming from Asia are built around the ports of LA and Long Beach.  Diverting to Oakland or Sea-Tac or anywhere else just compounds the supply chain problems as it simply means the containers then have to be transported from those ports to southern California to feed into the distribution networks.  There are no real short term solutions to getting around that problem without completely refiguring how distribution networks in the US are built.  

One last compounding factor, delivery speed is becoming a paramount consideration for a whole lot of retailers, which means warehousing is rapidly transitioning to numerous smaller facilities located closer to customers instead of mammoth but remotely located facilities.  Supplying these of course adds to the expense, logistics, and inputs into distribution networks.  

Back to the original question..."What happens to anyone wishing to get their products built over in that cheaper labor market,..where does he/she find a viable manufacturer??"  The answer is that the vast majority of the current price increases are happening in transportation and distribution, it's hard to effectively move manufacturing anywhere in that part of the world that would escape those factors.  

Jeff Moore

Elko, NV 

Reply 0
ctxmf74

@Russ the way a container ship is unloaded.

  Thanks for the great summary of the operation. It's refreshing to read something from someone that actually knows about the subject. Sounds like the operation is well planned and we just need to practice  a bit of patience.  I recall watching ships unload at San  Francisco when it was still an active port. They used big nets to lower the cargo and stacked it on shore with lots of labor. Roaming around one could smell chocolate, spices, and all kinds of exotic stuff. Toyotas and Datsuns were driven from a door in the side of the ship and parked along the docks.  Despite all the inefficiency we still got our products. It might be a good idea to return a bit toward more local based transportation systems although that would probably not be popular with those at the top of the food chain who like to get the biggest possible piece of the pie.. ...DaveB   

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Neal M

He's not out of the business...

Mike Wolf is still in the model train business. Sold off many parts of the original business and is only doing 'special runs' of uncatalogued O scale / O gauge trains. 

I get the email blast just about every day...

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jimfitch

I have a major concern about

Quote:

I have a major concern about how shipping cast from overseas is going to affect both the prices of our model railroad items,...AND their availability.

I'm not sure how much worrying about it will do other than make us worry more and worrying isn't good.  But I imagine the whole country is concerned.  Reading the news is just an exercise in depressing info anymore.

.

Jim Fitch
northern VA

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YoHo

You know what, I DO NOT have

You know what, I DO NOT have major concerns about logistics issues and our hobby. It's such a much bigger issue affecting almost every aspect of our lives. Model Railroading will move forward just as the rest of us will. 

 

And as noted, some of the things Brian has brought up are so out of date that they are solved problems...and then new problems happened afterwards. Like Kader/Sanda Kan. Kader took over Sanda Kan in 2008, 13 years ago. There's nothing about that that is relevant anymore. We've been living with it for a decade now.

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santafe49

Why Ships Don't Reroute to East Coast Ports

A very good explanation why ships won't divert to the East Coast. 

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