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in the early morning hours of august

22nd 2021 the maersk essec pulled away

from birth 402 at the ports of los

angeles california after navigating

through the breakwater the ship made a

westward turn beginning a two-month

seventeen thousand mile twenty seven

thousand kilometer voyage from america

to asia and back

this is in the context of today's ocean

shipping industry a rather unremarkable

journey on a rather unremarkable ship

just 15 years ago though the maersk

essex would have been truly

extraordinary you see the essex boasts a

capacity for 13 092 20-foot containers

or teu 20-foot equivalent units in 2006

the zen los angeles entered service with

the capacity for 9600

teu

this was heralded with proclamations of

a new era for shipping as the gen ranked

as the single largest container ship

sailing the oceans in summer 2021 though

the ever ace took its maiden journey

from asia to western europe with a

capacity for 23

992

tu two and a half times more than the

largest ship of a decade and a half ago

as a point of comparison that means this

one ship could carry every single

container the 100 000 person nation of

saint vincent and the grenadines

received in 2020 at once and then add

bermuda's annual container traffic on

top of that now this trend towards

larger and larger ships is indicative of

another major trend in the shipping

industry consolidation

recognizing the incredible economies of

scale in an industry founded on the

principles of economies of scale the

largest container shipping lines

recently worked to reap a cost advantage

that their smaller competitors could not

by aggregating a larger quantity of

containers onto fewer ships this is both

a cause and effect of the fact that in

2000 the top 10 shipping lines

controlled 51 percent of the global

market but now they hold 85 percent

bolstered by historically low ship

building costs maersk msc evergreen and

others elected to order these new

behemoth ships rather than buy or

renovate used ships to operate on their

busy asia to europe and asia to western

north america routes so a 13 000 tu

behemoth like the essex a record breaker

in the wrong year is now but a rather

unremarkable workhorse of a ship fixed

on a regular route from los angeles

after an uneventful 10 days traversing

the pacific the maersk essex stopped at

its first port of call yokohama japan

the stop lasted 8 hours as cranes

unloaded containers from the americas

then loaded more bound both east and

westward soon enough though the essex

pulled in its lines thrusted away from

the dock and carefully navigated its way

out of tokyo bay once it reached open

water however it actually slowed down

slightly for rather strategic reasons

you see in 2008 in the early days of the

financial crisis shipping lines faced a

perfect storm of circumstance shipping

demand was rock bottom and fuel costs

were sky high the lines had to innovate

to survive and so a working group at

maersk came up with a stunningly simple

proposition

just go slower you see like most

vehicles ships are more efficient at

slower speeds but companies were always

worried that operating a ship over a

long distance below its designed

cruising speed could damage its engine a

quick way to squander any fuel savings

maersk proved this belief false though

and so began operating many ships at 14

to 18 knots rather than 22. this proved

financially advantageous most industry

players observed 10 to 25 fuel savings

on a given journey and in time going

slower became standard practice

industry-wide of course when the

shipping market's hot lines will operate

at higher speeds since they'd rather get

cargo to its destination and pick up

more containers sooner but when it's not

it's a simple way to simultaneously

reduce operating costs and remove

capacity from the system when it's not

needed this is exactly what the maersk

essec did after leaving yokohama with no

need to get to its next destination

quickly it reduced speed all the way

down to 12 knots as it meandered through

the east china sea which doesn't seem

like it'd be a notable practice but slow

steaming has been one of the most

significant industry innovations of the

21st century given the slow pace it took

five days for the essex to arrive at the

port of shaman china where it sat for

some 36 hours as thousands of containers

were unloaded in the afternoon of

september 8th though it pushed off once

again ready to venture deeper into the

far east on this stretch of the journey

through the south china sea the vessel

passed closest to the country that most

of its crew members call home the

philippines you see with few labor laws

regulating who can work on ships sailing

in international waters it's only

natural that cost-conscious shipping

lines look for staff from the lowest

cost of living countries in short they

look for those that they can pay least

arising from a mix of culture tradition

and education the philippines has

established itself as the single largest

source of maritime labor in the world

some 77 of ratings unlicensed low-paid

junior mariners that assist with some of

the most physically demanding tasks are

from the philippines

overall the industry unperturbed by

national boundaries is incredibly

international a danish-owned ship will

be built in south korea registered in

panama captained by an american and

crewed by mariners from the philippines

india bulgaria russia and beyond

the westernmost point of the maersk

essex journey was here the port of

vangtai vietnam it tied up to its dock

on september 10th these brief port

visits offer most crew members some rare

moments of continuous free time as the

cranes handle the work of loading and

unloading the ship the crew is typically

allowed to leave the ship see the sights

experience some nightlife so long as

they're back on board in time however

because of the border restrictions

imposed by many countries in response to

the covet 19 pandemic this practice of

brief short visits to foreign countries

has become impractical or impossible

further toughening an already difficult

style of life so after it's 44 hours

physically but not practically in

vietnam the essex started spinning its

propeller once again on september 12th

and the crew members went back to an

endless routine on an endless ocean

now some of vietnam's primary exports

include shoes clothing and textiles

these are typically not very price dense

products for example a box of cheap

shoes takes up a good amount of space

but might only sell for twenty dollars

in the us however the fact that a

company can manufacture shoes in vietnam

ship them across the world to the us and

still turn a profit on a 20 sale price

is indicative of just how unbelievably

inexpensive ocean shipping is on a human

level before the tumult that kovid

brought to the industry shipping lines

typically charged about one thousand

dollars to carry a 20-foot container

from asia to the us

that 20-foot container could hold some 3

500 shoeboxes meaning the cost to

transport a shoebox 8 000 miles or 13

000 kilometers across the world from a

port in vietnam to one in california was

about 30 cents

when people talk about ocean shipping

enabling globalization

this is what they mean the fact that

transporting a shoebox quite literally

to the other side of the world costs

less than a single mcdonald's chicken

nugget means that location and distance

are hardly factors in today's world of

manufacturing

the maersk essex's next stop was hong

kong were adopted at the quite sim

container terminal for 32 hours between

september 15th and 16th it then took a

slow meandering path around the

territory dropped anchor for 24 hours

then worked its way into the port of

yanchan located near the factories of

shenzhen

now with its capacity for 13 092

containers there are of course 13 092

different spots where a container could

go on the maersk essex

naturally in practice it's far from

random

complex expensive computer programs

crunch a huge variety of factors to spin

out the ideal storage plan for a given

journey to start with there's the

obvious stuff you want in this journey's

case the containers for yokohama to be

placed on top of those for shaman so one

doesn't have to unload shaman containers

to get to the yokohama ones when there

then the program needs to be sure that

certain containers are in particular

positions refrigerated containers need

to be in a spot with a power supply

while those carrying goods with the

potential for leakage like animal hides

need to be placed in a spot where they

can be easily accessed by the crew while

underway meanwhile other containers must

not be in particular spots this table

displays the regulations for the storage

of hazardous materials it indicates that

items that are dangerous when wet for

example must be stored at least six

meters away from radioactive substances

while corrosive materials must be stored

in a completely different compartment of

the ship from infectious substances on

top of these and a multitude of

additional factors the ship has to be

roughly balanced meaning overall the

storage plan is a massive game of 40

tetris that only a computer can perfect

after 52 hours of implementing that plan

the essex made a quick overnight journey

up the coast to arrive back in shaman

where it made its longest stop yet 56

hours loading a final batch of

containers

this was also the last chance for the

ship to load up on food and fuel before

what would be by far the longest leg of

its journey finally just before 6 am on

september 24th loading was complete and

it was time to shuttle another payload

of thousands of containers to north

america the maersk essex passed taiwan

worked its way through the east china

sea then threaded the gap between south

korea and japan after hugging the

country's coast it sailed through the

busy bottleneck of the tsugaru strait

and entered the cool open waters of the

northern pacific the essex entered

american waters for the first time as it

sailed near the alaskan aleutian islands

but then exited the country's exclusive

economic zone as its track started to

trend south after nearly two weeks on

the move the ship's path started to

parallel the california coast until the

essex passed the state's channel islands

and turned east on october 6 it slowed

to a stop dropped anchor and then just

sat

on october 7th it did the same

nothing more happened on october 8th 9th

10th in fact for the next 17 days a

longer stretch than his trans-pacific

journey the maersk essex sat on anchor

within sight of california's largest

city

waiting for an open birth

the time finally came on october 23rd

after 62 days the maersk essex arrived

right back where it started

birth 402 at the port of los angeles

now the port of los angeles is located

right next to the port of long beach and

while the facilities are technically

independent from each other they take

advantage of shared infrastructure like

roads and railways

combined the complex handles about 40 of

all container cargo coming into the

country this is because like most of the

industry ports benefit hugely from

economies of scale you see for imports

coming from asia it rarely makes sense

to send ships to the east coast despite

that being the side of the country where

the majority of the population lives

that's because that would require

routing through the panama canal whose

largest set of locks can only

accommodate ships up to 14 000 teu

smaller than many new container ships

and even then transit fees are well into

the hundreds of thousands getting a slot

can be difficult and routing via the

canal extends journey times

significantly that's why most asian

imports are offloaded on the west coast

but the us really only has five major

deepwater container ports on the pacific

long beach los angeles oakland tacoma

and seattle located in by far the

largest metro area on the coast the

ports of long beach and los angeles have

naturally evolved into the busiest as

they have the greatest access to labor

transport and infrastructure these three

factors are the most important for ports

because after all nobody's shipping

things to the port of los angeles

they're shipping things through the port

of los angeles it's all about getting

cargo containers from the ship and on to

onward transportation as quickly and

efficiently as possible

now the port itself is essentially the

landlord to a number of private

companies that actually run each

container terminal for example this

facility is run by using terminals this

one by everport terminal services this

one by phoenix marine services and this

one where the maersk essex started and

finished its journey by apm terminals

now once the essex was docked the first

step was to physically remove containers

from the ship which was accomplished

with these massive cranes each typically

unloads 30 to 40 containers per hour

onto trucks that move the containers to

a temporary storage location somewhere

in the terminal then there are three

possible onward transportation methods

first they could be loaded on a smaller

ship or barge that moves the containers

to a smaller nearby port although this

is rare in los angeles compared to a

place like the pearl river delta where

there are plenty more water access

population centers and industrial areas

second they could be loaded onto freight

trains this direct access to railways

the cheapest method of land-based

transportation

is in fact a major advantage of the port

of los angeles by far the most common

method of onward transportation from the

port of los angeles is however trucks

they enter through the terminal's gates

hitch up to a waiting container then

drive it to its final destination

whether that be on the other side of the

city or country

so why is it that the maersk essex had

to wait 17 days just to unload its cargo

what part of this system is broken

well in short

all of it

there's no one factor contributing to

the asia to north america supply chain

slowdown but rather the system is just

overloaded

most indicators suggest that

trans-pacific shipping demand is up

about 25 compared to the pre-pandemic

baseline which isn't a massive increase

but it's sort of like congestion on the

highway

traffic is an exponential problem when

one lane is closed on a busy four-lane

highway your journey takes more than 25

percent longer stopping and starting

takes time that adds up and slows the

overall flow down exponentially this is

why ramp meters work they prevent excess

traffic from entering a highway keeping

it at capacity and flowing freely so

even if it takes longer to get on the

highway each person's overall journey

time is less it's the same situation

with ocean shipping it's a system with a

capacity so when it's overloaded by 25

the slowdown is more than 25

once a container is offloaded it's

placed into a sprawling terminal filled

to the brim with an increase in traffic

more trucks than usual are waiting in

line to get through the terminal gates

to pick up their cargo which means

picking up a container takes longer

which means a truck can't get back to

the terminal as quickly which means

there are fewer trucks available to pick

up containers which means more and more

containers stack up in the terminal with

containers leaving the port less quickly

there's less space for new containers

which means it takes longer to unload

ships which means ships are having to

wait longer to get into the port which

means there's less shipping capacity

since journey times are longer and ships

can't get back to asia to pick up a new

load as quickly meanwhile all the

congestion means that terminal operators

are restricting or prohibiting shippers

from sending empty containers back to

asia which means that shippers in asia

are struggling to find containers to use

which means that they're having to buy

new containers which pushes up their

shipping costs

and then all the supply chain chaos

means that shippers are sending goods

earlier which increases demand which

furthers the supply chain disruption

it's not so much a vicious cycle as a

vicious web

chaos compounding chaos

this is what happens when disruption

hits an industry designed to be

extraordinarily standardized a system so

reliant on economies of scale that the

world's largest economy has to rely on

five interface points with the world's

largest manufacturing hub it's a perfect

system a system responsible for many of

the revolutions of the last century but

systems reliant on perfection are those

most vulnerable to disruption

for now though the cogs keep turning the

mars essex is out there somewhere

between california and vietnam shuttling

another load of containers from

continent to continent

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