But... don't the ships have to get back to China somehow, if they are going to bring more cargo from China to north america? Why don't they take containers (even empty) when they do so, especially when they are so valuable.
If the ships aren't piling up in north america, how are the containers? Are ships leaving north america without picking up containers and if so why?
> Are ships leaving north america without picking up containers and if so why?
One reason is given in the article: it’s more profitable not to wait to load up the empty containers and instead to go back and quickly ship another full load out of China
I guess eventually the prices have to catch up
Edit: I misread this is not clearly stated but I think still somewhat implied since they are not waiting for cargo to ship back they probably aren’t waiting for empty containers either
(It looks significantly better than a month or two ago, though, when ships were anchored 30-40 miles offshore because there was no more space for them.)
That would mean idling your ships, and not in the expectation of picking up a lucrative cargo, either - and there is no guarantee that you will be the direct beneficiary of your benificent action. It's a variation of the 'tragedy of the commons', where the individual incentives are not aligned with the optimal outcome.
In fact, it is very like the incentives to send out your fishing fleet to scoop up another catch before all the fish are gone.
This isn't really a tragedy of the commons, the price of shipping containers will rise until it is profitable to return the containers to Asia. This is a classic example of markets working to allocate resources via pricing signals. The only quirk is that when there is a month-long ocean voyage involved there is some lag time before things change.
I would call it a market failure if someone wants to obtain a container, and cannot do so at any price.
There are ag producers on the west coast who cannot obtain containers regardless of cost. That article quoted a 2x increase - there are plenty of people who would gladly pay that and more, but containers cannot be sourced.
There is a time factor to markets too. I'd call it a market failure if someone wants to obtain a container and cannot do so at any price for the indefinite future, but if you're willing to pay more but need to wait for an ocean voyage, that's just reality.
Markets are not magic - they don't let you ignore physical reality. They're just an eventually-consistent system that aligns incentives to meet demand. It's like a transcontinental trip: you can spend maybe $150 in gas and get there in a week, or you can spend $700 and get there in 6 hours - but (at least until Boom starts flying) you're not going to get there in less than 5-6 hours no matter how much you're willing to spend.
If the ships aren't piling up in north america, how are the containers? Are ships leaving north america without picking up containers and if so why?