Where do all the shipping containers come from?

March 29, 2019 11:44 AM

What are the supply chains and logistics flows that lead to the apparent surplus of freight shipping containers all over the world, being converted into cafes, shops, small houses, labs, etc?

I just find it odd that they appear to basically be the global logistics equivalent of single-use plastic, at least judging by their ubiquity. Why aren't they getting reused for shipping so as to reduce overall production or their metal recycled? What are the logistics that lead to shipping containers seemingly being abandoned all over the world? If it's economically infeasible to reuse them, what happened to the excess before someone had the bright idea of converting them into trendy cafes? Some of them clearly get reused, why not all of them? Is there a number of times a container can be used before it's condemned to an afterlife dispensing third wave coffee and expensive menswear?

Basically, tell me what's up with shipping containers.

posted by tavegyl to Grab Bag (12 answers total)

Someone could write a book. Books, actually.
posted by Glomar response at 11:47 AM on March 29, 2019 [5 favorites]

I distinctly remember someone pitching an investment opportunity to my parents in the late 80s/early 90s that was aimed at taking advantage of the glut of available containers - and this was a good deal before they became commonly used to hold pop up shops, food courts and the like.

Also i am pretty certain that the self-storage that we used for my family's small business when i was growing up was just an empty lot with a ton of these lined up end to end in rows.
posted by Exceptional_Hubris at 12:02 PM on March 29, 2019

I believe there has been significant excess capacity over the last decade, with trade slack but lots of ships (and containers) launched. On the trade side this is likely to get worse if we carry on moving towards Trumpian trade wars.

Containers get written off in accounting terms after about twelve years, and users tend to be cautious about seaworthiness. But they can actually survive in some state for decades.

Sometimes, perhaps through poor management, it’s cheaper to abandon a container than send it home. Typically it’s reckoned about half a container’s working life is spent empty.

Disclaimer: I am not an expert.
posted by Segundus at 12:36 PM on March 29, 2019 [4 favorites]

They're reused for 10+ years, but there are over 5 million in active use right now - that would mean half a million getting retired every year, and half a million shipping containers that suddenly have nowhere to go. Some are too destroyed (dented, rusted, holey) to do anything with, some are probably recycled, and some are any other thing you can think to do with one. But if only 1/2 of a percent of those decommissioned containers get turned into tiny homes and silly stuff like that that's still 25,000 per year. If it's 2% or 5% it starts to be really, really substantial numbers. The issue is just that shipping is a mindbogglingly huge industry, so even if you just see a tiny amount of what gets left over, it's still pretty big.
posted by brainmouse at 12:51 PM on March 29, 2019 [13 favorites]

Someone could write a book. Books, actually.

Or make a podcast.
posted by zamboni at 1:15 PM on March 29, 2019 [5 favorites]

Shipping containers are almost all made in China, for about $3,000 each. They are shipped out, full of stuff. The amount of material being shipped to China in containers is not as great as the outbound amount, so the demand is lower. They then pile up at the receiving end. The cost to ship them back to China is less than the cost to make them, so there are often shiploads of empty containers that are sent back.
posted by Midnight Skulker at 1:53 PM on March 29, 2019 [2 favorites]

Midnight Skulker has it exactly right-- we deal with hundreds/thousands of containers a year from all over the world, they all get reused! The shipping company usually owns the containers, and a smaller amount of chassis (the bit of the truck the container sits on) and they'll deliver it to the vendors and then to the customers in a neat life-cycle. They don't like their chassis's doing nothing!

So, imagine the shipping company has thousands of containers and thousands of agreements to deliver between various companies-- in this case one agreement is between Carol's Carrots and us.

They'll get a call that Carol's is ready with a loaded container, and they'll send a driver with an empty container to Carol's-- the driver will drop the container at loading bay 1 and then hitch the full container at loading bay 2 and drive to the dock.

The container gets loaded from the dock onto a boat-- and shipped across the ocean arriving at our port. We'll clear the container with customs, pick it up (often companies might use a third party for this) and take it to our warehouse and offload it, when it's empty we'll drop it back to the port. If you wanted to offload slowly, or have it sitting around for a while, you'd usually pay a rental fee because you're probably tying up a chassis owned by the shipping company (you rarely put a container on the ground outside of a port-- usually that means you're doing something wrong logistically).

It gets loaded back onto the ship (usually empty in our case, but if the shipping company had goods to head back-- it'd get loaded up) then offloaded at the docks and stored empty at the shipping company. When they got a call off Carol again, the process would repeat. No containers are actually uniquely allocated to Carol (just the class (dry, chill, frozen) and size (20ft, 40ft)) so they'll just be shuffled through as they're available.

If we want to buy a container for long-term storage, it can actually be a pain in the ass for everyone involved because they're so well reused-- but we'll reach out to one of our main shippers and just ask-- they'll have a range of options (and prices) based on when they are coming to the end of their working life, or are due a refit, and in that case, they'll find the right one, and ideally send that to Carol's, then we'd have to talk to Carol's to tell them to wait for a specific container to load our order onto-- but if we jump through those hoops, we'll end up with a container that we simply don't release back.
posted by Static Vagabond at 3:28 PM on March 29, 2019 [9 favorites]

My understanding is that these are a primary lynchpin of modern freight shipping, so it kind of makes sense that there will be extras so that people don't have to wait for ones to become available or arrive back home. Kind of like pallets, I guess. I would assume that the number of containers, extra and otherwise, are a measurement of maximum global capacity for shipping.
posted by rhizome at 4:58 PM on March 29, 2019

there are over 5 million in active use right now - that would mean half a million getting retired every year, and half a million shipping containers that suddenly have nowhere to go. Some are too destroyed (dented, rusted, holey) to do anything with, some are probably recycled, and some are any other thing you can think to do with one. But if only 1/2 of a percent of those decommissioned containers get turned into tiny homes and silly stuff like that that's still 25,000 per year.

You meant 2,500, I think. Your value would be 1/2 a percent of all the containers in use, not the containers retired each year. Unless my math is boned...
posted by Gilgamesh's Chauffeur at 5:12 PM on March 29, 2019

My understanding is that these are a primary lynchpin of modern freight shipping, so it kind of makes sense that there will be extras so that people don't have to wait for ones to become available or arrive back home. Kind of like pallets, I guess.

Containers and pallets are quite similar in a lot of ways: While they aren't strictly *necessary* - you can ship stuff breakbulk or floor loaded, respectively - they are terribly useful. They last a long time, but not forever. And since freight flows aren't perfectly balanced, they tend to pile up in certain places. Depending on costs, it might make sense to ship back full loads of containers/pallets, or it might make sense to write them off.
posted by Chrysostom at 7:47 PM on March 29, 2019 [1 favorite]

It's a little unclear from your post - are you under the impression that containers are only used once, and then discarded? Rest assured, they are absolutely reused, every single day. Until they get rusted out, or otherwise too damaged to protect the cargo.

Midnight Skulker is correct, the US and most other Western countries are importing way more goods from Asia than they are exporting anywhere, so it's common for ships to be carrying empties back to Asia to be loaded up for their next shipment. Every day of every week of every year.

Back when I was in shipping we had difficulty with our shipments to Africa, as oftentimes those containers would be "lost" - stolen, and used for housing. Our trade to Africa was mercifully low, so it was usually just an insurance thing and our office didn't do much more about it. That was many years ago though, I'm not sure what the current dynamic of shipping to Africa consists of.

Not only are the individual containers tracked, but so are the chassis' that truckers use to haul them. Those who use the containers are responsible for them anytime they are outside the port, and are fined if the equipment isn't returned. Every single container and chassis has numbers on the side that are documented for tracking.

Did you know that it's really common for whole, loaded containers to get washed off of the vessels during rough weather? That's the really disgraceful thing in terms of the environment, but try watching a loading and unloading operation sometime - it's literally a puzzle with 25 ton pieces - and the crane operators and stevedores can do a whole vessel in way less than 24 hours. It's fascinating to watch. Anyway, no one has managed to build a better mousetrap that would keep the containers 100% secure, while still allowing for tight loading operations at the port.

To sum up, often times when you see converted containers in western countries, those are damaged units that have been sold by the steamship company. They aren't really just discarded. If nothing else the line will sell them for scrap. Containers represent a big chunk of capital, after the vessels themselves. The companies are going to recoup those monies whenever they can.
posted by vignettist at 9:09 PM on March 29, 2019 [3 favorites]

Good FPP from a few years ago on what's up with shipping containers.
posted by XMLicious at 4:35 AM on March 30, 2019