Shipping storage cost sentences to ponder

It costs $300 to move a 40-foot container from Rotterdam to Shanghai…Here’s some more context. Let’s say that you want to travel for a year; it’s cheaper to put your personal belongings in a shipping container as it sails around the world than to keep it at a local mini-storage facility.

That is from Ryan Petersen, via Dan Wang.

Comments

$300 for Rotterdam to Shanghai seems awfully low. How much is the trip in the opposite direction? Is this one of those cases where, due to asymmetrical flows, almost all of the cost of the round trip is charged for the one direction?

Perhaps, but a super-ship like the Emma Maersk can hold 15,000 TEUs, about 7,500 40' containers. So that's $2.25 million @ $300. And that rate may be only of limited availability for small shippers, just to fill out the load.

By my back of the envelope calculations the fuel costs for the trip come to only about $100 / 40' container. That's a very decent profit margin (I know I haven't factored in fixed costs etc.)

Wow. That's cheap.

So why do I have to pay so much for shipping to import books? The shipping is more expensive than the (second hand) books! Do they think I am a sucker?

Any retailer thinks you're a sucker.

"Only fools and tourists pay retail." -friend who owns retail store

So I was lied to. The same way Gyro Gearloose is called Professor Pardal (Professor Sparow) in Brazil, but he is neither a professor nor a sparrow. It is a sham.

The quote I read some years ago was US$ 0,03/ Kg from China to Brazil. It means 30 dollars per metric tonne. If each book weighs a pound, it means about 2,000 books for thirty dollars, 67 books per dollar. Yet they want five bucks to send me a single book, that is, 335 times more proprtionally from the US -- just around the corner. http://www.abebooks.com/servlet/FrameBase?content=%2Fservlet%2FShipRates%3Fvid=51315977
335 times! Who they think they are fooling? When I was young, a businessperson caught doing something like that would slit his/her wrists to spare his/her family of the shame, but now greed has a free rein everywhere.

Well, if you want the retailer to just chuck your buck in a shipping container full of books and then you come down to the docks and find it in there, I'm sure they could reduce costs somewhat?

book, not buck :)

The quote I read some years ago was US$ 0,03/ Kg from China to Brazil. It means 30 dollars per metric tonne. If each book weighs a pound, it means about 2,000 books for thirty dollars, 67 books per dollar. Yet they want five bucks to send me a single book, that is, 335 times more proprtionally from the US — just around the corner. http://www.abebooks.com/servlet/FrameBase?content=%2Fservlet%2FShipRates%3Fvid=51315977
335 times! Who they think they are fooling? When I was young, a businessperson caught doing something like that would slit his/her wrists to spare his/her family of the shame, but now greed has a free rein everywhere.

Here in Germany, the container ships are basically owned by hundreds of dentists. They were sold to them by the same shady bank advisors who'd already sold them East German junk real estate in the 90s (they got rekt). And the argument in both cases was tax. One might have thought that dentists are able to learn, but apparently this is not the case.

The investment cliche in America is that you want to do whatever is the opposite of what dentists are investing in.

When we lived in Oz dentists were notorious for buying macadamia orchards. As everyone else said, "nuts".

Anyway, I thought German dentists, doctors, and politicians all dodged tax by using Luxembourg?

Yeah, but Luxembourg is basically illegal, and the German tax authorities are actively buying the data, so you need to be a bit more risk-minded. While shipping is a legal tax loophole afaik. Never mind the capital losses. They probably get told it's a super duper safe Investment, and since the salespeople are handsome and wear a tie, the dentists believe them. Also, dentists have cash (until they don't).

Doctors in general, MD = money dumb.

I lost a boat load of money on DSX.

This is a flat out lie. The prices that a major vessel operator may charge an nvocc may be $300 dollars per 40-ft (This maybe a lie too as I don't have my spreadsheets in front of me), but cost of vessel space is only a minor component of overall shipping costs. You need to add in domestic trucking, document fees, terminal handling charges, port fees, export customs, bunker fees, import customs clearance, duties, vat, harbor maintenance fees, merchandise processing fees, warehousing and demurrage fees, security examination fees, destination trucking fees, marine insurance, wharfage, etc.

Suffice it to say that there are multiple costs in international shipping beyond merely the cost of vessel space itself. A company shipping from Shanghai to Rotterdam can more accurately expect to spend $3000 per 40-ft container instead of $300.

This is blatant dishonesty masquerading as a fact.

Thanks. Everyone always forgets wharfage.

Thanks for stating what should've been obvious: that in the case of sea freight, the direct cost of vessel space is only a minor component of the total freight forwarding cost. I have a quote for LCL (less-than-container load) from France to Australia in front of me right now and "sea freight" proper for two pallets is €150 out of a total quote of €1,145.

Ok, you are right that the total costs are not being included, however, local storage units that are smaller cost more. One can ignore wharfage in both cases.

The quote I have been read on a newspaper a few years ago was US$ 800,00/container from Red China to Brazil (almost antipodes--and Brazil does not have a Pacific Coast, which would save time and money).

>This is blatant dishonesty masquerading as a fact.

Welcome to Marginal Revolution!

Look back a little ways, and you'll see a matter-of-fact statement that Christopher Columbus committed genocide.

Lots of free space in the ocean. Simply supply and demand.

Mini-storage is an interesting industry, built on endowment effect rather than rational cost-benefit analysis.

In psychology and behavioral economics, the endowment effect (also known as divestiture aversion and related to the mere ownership effect in social psychology) is the hypothesis that people ascribe more value to things merely because they own them.

The majority of stored goods would better trashed and replaced at lower than storage cost.

Or maybe people don't want to spend a lot of time searching for new furniture that they like at a reasonable price when they already have stuff they know they like?

The thing that made Storage Wars dynamic TV was that most lockers were worthless, and even the ones thàt had value were mostly useless. It was the odd valuable item in 1000 cubic feet.

In the LA area there are a half dozen units auctioned each and every day. That is a lot of accumulated loss.

6 units a day in LA seems like nothing to me. My recollection of Storage Wars (which by the way I think is 99% fabricated) was people selling a chair for $25, a curtain for $15, stuff I would not think would even be worth the effort.

There's got to be a bit of selection bias in which lockers go to auction, right?

I mean, the guy who has a locker worth $500 vs. the one with a locker with contents worth $50,000... guess which one is more likely to make sure their storage fees are paid on time and not forget about the locker?

It's an interesting point. Seems reasonable though to think a lot of people systematically underestimate warehousing costs. Even kitchens and closets are often mostly dead storage with a few used items nestled amid junk. It may look trivial at the margin (why not a few extra spoons or never-worn shirts) bit adds up to buying a lot more housing than you need. If you want to make 'em rational, you have to argue something else is going on with collecting and assembling objects.

Well there are some things you rarely need but it's a huge pain in the ass if you need it and you don't have it...

We intend to sell our house and sail/travel for several years. I really like many of the things we own, but fully expect to liquidate anything that's replaceable and re-buy when we get another house.

That was an outlier. The rate is back up to about $1,150 for a 40 ft container. Also, rates are determined by volume. The cost is much higher (probably double) from Shanghai to Rotterdam as it is from Rotterdam to Shanghai, since China ships a LOT more stuff to Europe than the other way around. Most of the container volume from Rotterdam to Shanghai is empties. (Source: worldcontainerindex.com - free registration required. I have no affiliation with this site.)

I knew it!

Shipping container houses with people inside?

http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=folding+container+house

If $300 shipping does not impress, will the $5 Raspberry Pi do so?

It is roughly a Cray supercomputer driven by Moore's Law to $5. Or free with a magazine. Perhaps we are inured to this kind of progress?

Pro tip: treat any $1000 personal tech as affordable luxury, and not necessary investment

Thanks for the interesting link. I was planing to buy an Asus UX305 and happy to pay only half the price of a MacBook for the same HW......but this puts things under a new perspective =) no need of new computer

As others have mentioned, the $300 figure is unrealistically low. Even if we take that number as correct, it costs about $2000 upwards to ship from Shanghai to Rotterdam. It takes about a month in either direction. So, total costs for a year are about $13800. Just sea freight, no incidentals.
I guess one could lease a decent (?) home in the suburbs of any major American city for $1100/month. You could store more stuff than 1 40'FCL can hold.

Still, 300 is cheaper than it's ever been.

And you can fit a lot of stuff in a 40'. Way more than any suburban basement.

My in laws are currently cruising about 2 weeks per month. They joke it is cheaper than assisted living. Buy last minute deals on the line with the most recent outbreak or fire - currently Carnival, I guess. About $250 a week for 2. All you can eat and usually a Colombian or Slovakian MD on board. Entertainment nightly. If you are diamond or whatever, free drinks!

What about Internet access at sea?

I wondered how much stuff would fit in there. Here's what I found for shoes, which come out to 3 cents a pair for shipping.

40’ Foot Container load of shoes.

Can fit about 5,000 pairs of boot size shoes to over 10,000 pairs of standard size shoes pre-packed in shoe boxes. If you don’t want the shoe boxes and replaced with custom designed bags or similar, you can pack a bit more pairs. Can be shipped worldwide to acceptable locations. One major benefit of 40’ foot container shipments is your shipping cost savings among other things

Source: http://www.americanshoefactory.com/category-s/42.htm

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