Long Beach has temporarily suspended container stacking limitations (opens in new tab)

> Allowing stacking over 2 high is only useful if you have the equipment to stack over 2 high.

These are empty containers that are getting unloaded and stacked in order to free up the truck and its chassis for another load. The equipment for doing that stacking/unstacking is called an Empty Container Stacker [1]. These are different from a Reach Stacker [2] which will have much less vertical reach and are also different from Container Cranes [3].

[1] https://www.goldbell.my/material-handling-equipment/port-han...

[2] https://en.wikipedia.org/wiki/Reach_stacker

[3] https://en.wikipedia.org/wiki/Container_crane

That's neat, but isn't this whole thing about stacking restrictions on empty containers?

My understanding of what the Flexport CEO said in their twitter thread was that the best example of the problem is the haulage company that's keeping its driver count * 3 empty containers around on-chassis (which I think means on wheels), just sitting in their parking lot, because they have nowhere to put their empties, because they empty-storage is maxed out at the 2-height capacity. All/most of the haulage company's chassis are now tied up with empty containers, which prevents them from being able to go pick up filled containers to ship, which stops the full containers from getting picked, etc.

Most of the stacks are already at 6 high https://www.tiktok.com/@stanimal18/video/7019310183545376006. The automated storage & retrieval system cannot go higher. Peel pile would be great if the empty containers did not have to be taken to Dallas. It is questionable if this is a government failure to zone empty buffer yards out in desert as there would be even less of an incentive to return the empty containers; changing the zoning at the secondary yards does not fix the underlying incentive issue and should only be put in place once the ratio of the rate at which new containers are being received to the rate at which containers are leaving begins to decline to accelerate the removal of the bottleneck. The storage fee needs to be raised to a point at which it is justifiable to move the empty containers out over processing fully loaded containers until the storage bottleneck is removed. Changing the zoning before figuring out the rate problem almost surely will just make the bottleneck worse. It would also be interesting to know if it would be feasible to make the containers able to be disassembled and multi-packed into an empty container.

> Truckers are leaving containers all over Los Angeles.[1]

There are so many of them, that they couldn't find a picture of one of them to illustrate the article

> Allowing stacking over 2 high is only useful if you have the equipment to stack over 2 high. A place that just stacks empty containers 2 high probably only has large forklifts. The special equipment for high stacking is far more expensive, and only bought if you need it.

This begs the question: If container storage were the only bottleneck, wouldn't operators merely lease space further afield? There's plenty of space in Corona, San Bernardino, and environs that wouldn't take more than a 30 minute commute each way.

I can't help but feel like there are other confounding factors at play.

Sidenote... I think this might be the first time I've personally heard "There's an app for that" to essentially indicate "this is a solved problem" - even if in this case it does kind of mean "software exists to solve this problem" in a literal sense. We're only a decade or so out from when "there's an app for that" represented this cool new novel idea that you could install an app on your fancy new smartphone to do something useful. Now it's trivial and commonplace but I could see this slogan sticking around in our vernacular outside of its original context kinda like the save icon. Neat.

It sounds like these are complementary solutions, no? Some yards have stacking equipment, some don't. It seems far more reasonable to let them become "sinks" for containers, which they'd gladly do and which would require nothing other than removing red tape, rather than requiring adoption of a more complex routing system.

Though efficient, this sounds incredibly stress-inducing for drivers, since it makes them even less able to plan ahead and know their future work schedule.

Couldn't large forklifts that have enough weight capacity to lift one full container and enough height capacity to lift an empty container on top of another simply pick up a stack of two containers from the bottom at the same time and put the two on top of a third, making a three-high stack?

The driver has a cellphone no?

What if they stood the containers up on end?

> This is a system which assigns outgoing trucks an easily accessible container to deliver, rather than a specific container that has to be retrieved.

This is such an obvious thing. Do they really have people so incompetent they didn't think of that? Wow

> Yet somehow nearly no one in America is aware of this or concerned about it. I wish I understood why that is.

Because people love zoning! NIMBY is the rallying cry at zoning board hearings, where whiny people who only care about themselves make sure those Chinese people don't put their stinky laundromats near our nice rich white neighborhood. It's the main reason zoning exists! Particularly the wealthy people who have the influence to make it happen, but the casual racists of the past century, and middle class yuppies of the past half century, have plenty to answer for.

But it's also clear that bad zoning (like the 2-stack rule) is also an artifact of poor system maintenance. When you design a system, you may put in certain constraints for safety. Over time the system changes, but the entire design and its constraints are not re-evaluated for each change. So eventually you have constraints that are completely out of whack with the current state. Doesn't matter if it's zoning or a microservice architecture, you're going to end up with crappy legacy rules that only get re-evaluated when things break.

Just no.

Zoning is extremely important. You should not be allowed to build a factory in the middle of a neighborhood next to a school.

There are certainly bad zoning laws but to say they are all bad is just ignorant nonsense.

I think the bigger issue is that our culture sees housing as an investment vehicle rather than a commodity like food. You wouldn't stockpile a warehouse full of non perishables with the expectation that they will skyrocket in price. Likewise, nobody should buy multiple houses with the expectation that they will skyrocket in price.

Without this mindset, I doubt anyone would be so opposed to change zoning laws as cities grow/change

This is not a zoning problem, because the zoning laws have been in place for decades, while the port worked fine.

There is another root cause at work here. Temporarily suspending the zoning is just one of many short-term treatments to resolve a backlog.

Some form of zoning must exist because you don't want people living next to an incinerator power plant for instance, but like any good thing, it can be taken to an extreme and micromanaged into evil.

Well, I would be pretty angry if someone built a gigantic apartment complex next to my normal house, since I bought it on the impression I would not have that as a neighbor

"Yet somehow nearly no one in America is aware of this or concerned about it. I wish I understood why that is."

I can't speak for everyone but in my case it is because I grew up in an impoverished community that had little to no zoning.

I experienced first-hand what the built environment is and the emergent behaviors of people are when there are no rules.

See, you live in a place that is nicely organized and, presumably, zoned and you think if we got rid of the zoning then everything would be just like it is now but with a few more housing units and maybe some delightful mixed light-commercial interspersed and wouldn't that be great!

In reality what you get is a welding shop next to your house. And llamas. And people disconnecting from city sewer because by god they're not paying for that when their home-built septic works just as well. And Grandma died and what do we do with her horse I know we'll keep it in the front yard.

If you had any exposure to anything other than nicely zoned locales you wouldn't romanticize the absence of rules.

Arcane zoning rules are absolutely strangling society.

For those who didn't see the 5 points, I've copied them below from here https://twitter.com/typesfast/status/1451543776992845834

<snip>

1) Executive order effective immediately over riding the zoning rules in Long Beach and Los Angeles to allow truck yards to store empty containers up to six high instead of the current limit of 2. Make it temporary for ~120 days.

This will free up tens of thousands of chassis that right now are just storing containers on wheels. Those chassis can immediately be taken to the ports to haul away the containers

2) Bring every container chassis owned by the national guard and the military anywhere in the US to the ports and loan them to the terminals for 180 days.

3) Create a new temporary container yard at a large (need 500+ acres) piece of government land adjacent to an inland rail head within 100 miles of the port complex.

4) Force the railroads to haul all containers to this new site, turn around and come back. No more 1500 mile train journeys to Dallas. We're doing 100 mile shuttles, turning around and doing it again. Truckers will go to this site to get containers instead of the port.

5) Bring in barges and small container ships and start hauling containers out of long beach to other smaller ports that aren't backed up.

This is not a comprehensive list. Please add to it. We don't need to do the best ideas. We need to do ALL the ideas.

We must OVERWHELM THE BOTTLENECK and get these ports working again. I can't stress enough how bad it is for the world economy if the ports don't work. Every company selling physical goods bought or sold internationally will fail.

</snip>

I am no defender of government bureaucracy, but the fact we got the stacking rules changed in 48 hours is pretty crazy. I suspect more changes will come, but it may take some time. I'd let it play out over 1-2 weeks and re-evaluate.

Can't believe I am giving government delays a pass here... but I try not to look a gift horse in the mouth when we get near-immediate action from people who aren't known for solving problems with any sort of urgency.

EDIT: And I'm even a customer of Flexport!

The reason why the focus was on the first one is because that was the easiest and fastest to do (You only need local officials to sign off on it because its a temporary order and its also the simplest). 2 and 3 need the federal government to organize it, which as a large organization takes some time. 4 and 5 requires figuring out contract terms (who's paying whom, etc). These are much more complex and therefore will take more time. Oh and the tweetstorm was done on a Friday on the West Coast, so it takes some time to get the attention of decision makers on the east coast.

Also, isn't someone from the government supposed to be in charge of this? Shouldn't they be out there finding out what's happening?

It seems odd that no one has tried this, yet as someone who has worked in a factory, I can easily believe that the absentee managers have no idea what the hell actually goes on among the workers.

You need to spend significant actual time, to the point of working actual shifts, to get a clear picture of things sometimes. People have weird and wrong notions of what efficiencies matter sometimes, for example. Shaving a second off an action repeated thousands of times daily matters, shaving a minute off of a rare task that's not even done every day matters far less in comparison.

Does he mean negative feedback loops or positive feedback loops? Getting worse every day sounds like positive feedback, whereas negative feedback would keep things steady.

> I can't stress enough how bad it is for the world economy if the ports don't work.

Not for the world economy, but for Chinese economy, as it's what US companies make the most of their money.

What the current crisis shows the most is that just how close the US economy coming to a sever crisis, from well.... just missing the shipment of holiday toys from China.

If China can inadvertently move US markets through just messing up with shipping toys, imagine how bad a deliberate economic sabotage action would be.

"Please don't sneer, including at the rest of the community." It's a particularly low-quality, low-information sort of post, which reliably leads to worse subthreads, which is why we added that guideline.

https://news.ycombinator.com/newsguidelines.html

(We detached this subthread from https://news.ycombinator.com/item?id=28972094.)

p.s. Animats is a great HN commenter who knows a lot about a lot of stuff (not everything, of course). I don't know how much he knows about shipping but if you know more, a much better way to contribute to HN would be to share some of what you know, so the rest of us can learn. Supercilious putdowns of other commenters just degrade the community.

Most of them are usually the top comment on a thread like this, too, because there are a large number of people who consider them authoritative (or like what they say, or dogpile, or who knows). When it’s my industry being discussed here, I can usually predict who will be in the top spot (it’s only a few), and how wrong they’ll be. It’s a real problem but it’s also the immediate amnesia thing whoever-that-was talked about.

For the record that is one common prediction up there, in my experience, but I’m trying not to make it personal. There is very often a sense of reciting recent research into whatever the hot topic is, and little depth or mastery of any of those topics. But they score well, so here we are debating what is said instead of what is substantive.

True. But let's also note that being CEO of a company in the industry doesn't automatically make you right, nor does it mean that when you speak to a reporter or send out a tweet thread like this you don't have some sort of agenda. There's almost always an agenda. Maybe that agenda is honest and in line with public interest, maybe it isn't. And twitter is less reliable than a news story, because usually reporters seek more than one source and try to verify what they can, how they can. They're by no means perfect, but this dude can write whatever he wants.

I suspect that this measure just delays the inevitable. I'm also wondering why the limit of 2-high stacks exists (I'm guessing safety related in event of an earthquake?)

He has a lot of ideas in his other tweet thread, but I noticed that in his long list of ideas nowhere to be found was "offer better pay and working conditions for truckers."

The core issue is not too many containers. It's not enough truckers picking up the new containers, so there's no room for the old ones. And because the ships can't be unloaded, nobody can take the containers back to other ports.

It doesn't help that the full-in-union longshoremen (not the part-timer union guys) get way, way over $100k a year, some of them making $300k...and with zero requirements to meet any sort of metrics. They shouldn't be incentivized to where safety is compromised, but surely there is a balance. Right now they have zero incentive to do anything about the problem. The port sits doing nothing...and they sit too, getting paid.

The best HN commenters seem to speak only when it concerns their expertise, or do so after fully understanding the issues at play.

The Flexport CEO may know more, but the Flexport CEO also has an agenda of being profitable for the Flexport CEO.

This may, or may not, align with being solutions and advice that benefits the public at large. In fact, it is becoming increasingly clear that things are currently "optimized" strongly enough that squeezing more profit out of the system generally corresponds to finding a sucker to take advantage of--normally the public at large.

Startups and their leaders have a "move fast and break things" attitude that is no big deal when imaginary things like software is involved that becomes a big deal when non-imaginary things like people become impacted.

Stacking 6-high triples storage space, sure. But it doesn't stop container ships from running back to Asia empty.

So, that storage space will fill up quickly, and we're back where we started only now we have dangerously stacked high center-of-mass (because empty) containers (this is an active seismic zone, you know) that nobody wants to pay to get rid of until somebody dies and their insurance rates shoot up enough to make it necessary to dump the containers.

At which point, the shipping companies will magically make the shipping containers go away--probably illegally to somewhere you don't want them to go to.

How do you think the CEO of flexport became CEO?

When is the ceo of a company the real expert on anything? The ceo is the celebrity that makes the big decisions but rarely ever the actual ground level expert

The demand became a lot more lopsided for several reasons:

* consumers were shifting spending from experiences that would've been COVID impacted (holiday travel, entertainment venues, restaurants) to online shopping

* industrial supply chains in Asia were the least impacted by COVID due to the relative lack of explosion in cases there compared to the rest of the world, so we are legitimately shipping more from there and exporting less

* a good chunk of the medical equipment that has been necessitated by COVID (e.g. masks) is made in Asia and that has made demand even more lopsided

* there was a ship backlog because COVID impacted how ships were getting unloaded, and at one point they weren't sending back ships with empty containers to reduce turnaround times, and now there are not enough containers in China and too many in the US.

Wendover Productions video: https://www.youtube.com/watch?v=b1JlYZQG3lI

> Are we not exporting at the same rate?

Yes. To quote JP Morgan's recent article "Dude, where's my stuff?"[0]:

> The surge in US import demand has led to a sharp rise in eastbound freight rates (see charts for Shanghai->LA and Shanghai->Rotterdam). However, westbound freight rates have not risen nearly as much, leading to an odd and problematic phenomenon: incentives for container owners to move them back to China empty to accelerate receipt of eastbound freight rates, instead of waiting for containers to be refilled to earn westbound freight rates as well. This further exacerbates supply chain issues, since US goods (i.e., grains) that were supposed to depart US railcars and warehouses for export remain in place, occupying space that US imported goods were destined for.

[0] https://am.jpmorgan.com/us/en/asset-management/institutional...

It is completely standard in the shipping industry to have lopsided routes, where one direction has 100% full containers, and the return direction a much lower percentage, like 50%. The shipping cost of different routes takes this into account.

> A little off topic, but these ports don’t usually store so many empty crates, so why do we have them now? Are we not exporting at the same rate? Is that even what empty crates are used for? I’m assuming they aren’t sent back to (mostly?) China empty.

My understanding is that the us doesn't send all that much back to china, and that it was a problem for a while but wasn't the bottleneck until recently.

This is very bad for the rest of the world, and also for the US, since all the empty containers are stacking up there, then there aren't any empty containers available in China or anywhere else for exporters, so even getting your hands on an empty container can be very difficult or almost impossible, or they cost 2-3x more than usually.

Seems like more of a tragedy of the commons, with each ship (A) assuming it's fine to leave empty because some other ship (B) will grab the empty containers. That's all well and good until (A) comes back, and then it sits there waiting like everyone else.

Going back empty works once. Or more times if you're headed to a different market, I suppose.

Is someone paying for ships to do this or are they doing their own calculations and realizing it’s cheaper for them to leave fast?

TEU, for people like me who don't know shipping lingo: https://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit

Question: who is paying demurrage on these containers? Has that practice been suspended?

> ... recently I’ve heard of some ships not even waiting to load empty TEU’s as they normally would and instead they are immediately leaving for China, literally empty.

If this is happening, what would be the consequences of allowing even more TEUs to be stored on the US side?

The guy is a bad ass. If he wanted to run for President, he would win. I am really not exaggerating - I had a chance to meet him a few years back, and at that time he was the most impressive person I had talked to in person for an extended amount of time (not based on credentials or achievement, but simply based on clarity of thought and new ways of thinking). I also know that PG rates him incredibly highly.

To give you a taste, this is him 3 years ago: https://www.youtube.com/watch?v=hjUs7o-TnjY. I remember watching that video the first time and being particularly struck by his insight on how entrepreneurial sales is different from regular sales [1], which I have been able to apply since then on a regular basis.

[1] https://youtu.be/hjUs7o-TnjY?t=2499

I work at Flexport, Ryan is the real deal.

He didn't really address why there are so many unclaimed empties though. That seems like the real issue. Stacking them higher might work temporarily, but isn't the real problem the empties themselves.

Perhaps no one wants to ship them back because it's not economical?

> Especially import was the feedback loops showing how the system was essentially deadlocked, in the classical sense of the term.

This whole situation would make a great "systems design"-level tech interview question!

The renting a boat thing seems like a show. Hes got experts that should already know these things from other data sources. The boat thing is for simpletons in media to understand and spin

Some of these comments make sense, but this guy loves hyperbole.

> This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.

No, the global economy won't be destroyed because of backed up cargo ships in LA/Long Beach. Don't be ridiculous Ryan.

Just as a rule of thumb, a container is easily worth 10-20x what it costs to ship it from the US to China (under normal circumstances).

There's a reason they're reusable: these are quite sturdy boxes built out of high quality materials (steel frame, corrugated steel walls, thick hardwood floors), otherwise you couldn't stack them 10 high with 28 tons of goods in each of them.

No. Shipping container prices have risen threefold. The transshipment companies who have to deal with the containers piling up don't own the containers, and can't sell them to you.

On the contrary, they are insanely expensive right now. Too many empty shipping containers in on particular area means too few everywhere else that wants them. Shipping containers prices have skyrocketed.

Or maybe it’s a success of social media?

If we didn’t have social media cutting across the usual lines of communication, this problem may not have gotten fixed because no one had both the right information and the ability to act in it.

It is is depressing, that clear and obvious solutions were missing at economy-critical supply chain infra.

Never attribute to malice that which is adequately explained by stupidity.

But also it's 2021 where people are the most cynical we've ever been, it's almost like there's interest groups in the US that want a fanning of inflation or delayed recovery through shortages.

I think 'we' (as in high-intelligence individual technical people) need to be more vocal on social media. Look at the effect that small vocal minorities have on politicians and the media...

The problem is that technical people are usually too busy working or raising a family to frequent those channels. Unemployed or childless activists however have plenty of time for their causes. The 'vocal minority'.

I can see why you might see it that way, but I'd very much prefer an outside perspective being able to bubble up and present a solution rather than ma alternatives. This is certainly better than the way governments in the US usually try to use consultants to find inefficiencies.

How is crisis management supposed to go? What would have been a preferable source of this change?

It's often said that ToC is a popularization of operations management knowledge that already existed at the time. Is there a better textbook that is more technical and not too dry?

Eli would have loved that thread…

One would think that a former McKinsey consultant would understand constraint theory.

The guy in charge took a paternity leave for 2 months and no one in the media even noticed.

Because US ports are run by private companies and not the federal government. The "Port of Long Beach" run by the local port authority is primarily a landlord. It's called capitalism.

People are waking up and realizing that government is pretty useless for specific action. Our representatives would rather pontificate about vague niceties.

It doesn't fix anything, but it creates buffer space that can potentially be used to fix things that otherwise can't be fixed

If you order one now, the factory in china will ship it to you as soon as they can get it through the port in Long Beach.

Those don't look like they can lift a shipping container.

You can’t flat out say the rise in retail sales is due to stimulus. There are a lot of disruptions over the last year that have shifted spend from things like dining out and travel.

Well now you can stack even more containers in Long Beach. Just sitting there. Doing nothing.

I guess this means you can’t export either.

Literally wrecking the entirety of global supply lines in order to "spite" "Chyna"

How petty can US citizens be?

This. This right here is the voice of common sense. With fossil fuel-supply contracting in the coming decades and over-spread cities' infrastructures being impossible to navigate without transportation, the US will have no choice but to turn to rail. It's just a matter of "when", not "if".

As I understand the shipping fee from China to the US is very expensive right now, so ships don't want to wait for ports to load empty containers on. They turn around ASAP to catch another shipment from China, leaving all these empty containers at destination ports.

My mental model is that regulations are decided on through a political process, and then no one looks at them until it becomes a political issue again.

> The most capital intensive process of your business should be the bottleneck.

Can you explain what this means? You find the bottleneck, then invest the most capital to improve it? Or whatever you're investing the most is the bottleneck? Or something else?

I'm not an expert in this field but I know from experience that when converting buildings into logistics warehouses, the limiting variable most often is the carrying capacity of the floor.

I assume this is be the biggest risk factor that relates to lifting these limitations. The ground might not have the carrying capacity required for the loads that stacked containers can create.

Also, I'm sure nobody wants their view blocked by container stacks 5 high.

Wind, earthquakes, or accidents knocking the stacks over is a concern, I don't know how real it is though.

Well, assuming enough truck terminals have stacking equipment that can actually pile more than 2 high, it should free up some more wheels to start pulling full containers out of the port. But who knows? And it’s hardly going to solve this problem by itself.

Generally speaking, it's not allowed. The supply chain has a very long tail and there are all kinds of steps and contracts that are based on the destination specified when goods are first loaded on a ship. Unloading at a completely different port far away would be a nightmare. As for why ships aren't utilizing other ports more, see [1].

[1] https://www.wsj.com/articles/why-container-ships-cant-sail-a...

COVID mostly. Disruptions in supply and demand caused imbalances, and in places where there is not enough buffer space to handle the imbalances (like container storage in California) the buffers filled up and the whole thing stalled.

Nope. Unless you consider having to look at shipping containers to be a vital safety issue. From the City of Long Beach's announcement [1]:

> These provisions, which have been in effect for many years, were established to address the visual impact to surrounding areas of sites with excessive storage.

[1] https://longbeach.gov/press-releases/city-of-long-beach-stat...

“Don’t just do something! Stand there!”

Remember than the vast majority of the "infrastructure" bill is for "social infrastructure" and that the lesser amount of funding for the physical infrastructure is still subject to the contracting, procurement, environmental, safety, and other regulations at the federal, state, and local levels - all of which needs to be navigated before any actual work begins. By the time that is done, there won't be much left for materials and labor.