Posts Tagged ‘logistics’
“This is a cardboard universe”*…
As we rid ourselves of the detritus of the Holiday season, let us pause to consider its signature component: at the turn of the 21st century, corrugated cardboard accounted for just fifteen percent of the United States recycling stream; today, it’s nearly half. Shannon Mattern on the cardboard box…
… As historian Maria Rentetzi writes (“Cardboard Box: The Politics of Materiality,” in Boxes: A Field Guide), “the cardboard box — the waste of our commercial world — is recycled in such a way as to make visible the disorder in our societies, the faults of capitalism.” It is an abject object that touches all parts of the city, from the granite kitchen island to the sewer grate. And for many of us, the cardboard box is our closest touchpoint to globalized trade, structuring our relations with people in distant places. It brings the logistics chain to our doorstep. The magnificently ripped metal freight container may get the Economist cover shot, but the plain brown box delivers messages to our homes. Its very existence in our homes, Marshall McLuhan would say, is the message. In the immortal words of Walter Paepcke, founder of the Container Corporation of America, “packages are not just commodities; they are communications.”
Let’s unpack that, shall we? Boxes are media in multiple senses of the word. They’re lithographed surfaces designed to be read, and they’re dimensional containers that mediate between outside and inside worlds. They’re “media of transport and information, shapers of public opinion and consumer desire, and means of targeting attention.” And they’re “logistical media” that “arrange people and property into time and space,” that “coordinate and control the movement of labor, people, and things situated along and within global supply chains.” The cardboard box is a minimalist form with maximalist ambitions, an arboreal apparatus made from one of the world’s most abundant renewable resources, then filled with plastic and moved around by copious quantities of oil. It doesn’t just coordinate and control landscapes; it transforms them.
Cardboard’s ubiquity rests on simple claims: I can hold that, and I can go there. The Container Corporation of America was founded in 1926, and upon those claims it built an empire with surprising reach. The CCA made collapsible shipping boxes, and it transformed packaging into a science and an art. It advanced market research, shaped mid-century taste, and altered the chromatic universe through color standards. It employed some of the best graphic designers of the period, and as national borders shifted after the Second World War, it commissioned Herbert Bayer, author of the Universal typeface, to revise the World Geo-Graphic Atlas. Even then, the CCA was remaking that new world to meet its logistical needs, rehabbing mining towns and germinating forests, and orchestrating civic discourse about all of this.
How did a packaging company get into the publishing business — into the containment and distribution of information? How were geographic imaginations changed in the process? Soon we’ll dive into the Paepcke archive, to find answers to those questions. But first I want to show you how a cardboard box is made…
In turn, inspiring and horrifying– the social history of the cardboard carton: “World in a Box,” @shannonmattern.bsky.social in @placesjournal.bsky.social.
For an earlier (R)D focused on Mattern’s work: “To clarify, ADD data.”
* Philip K. Dick, The Dark-Haired Girl
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As we tape it tight, we might recall that it was on this date in 1910 that a federal official who might slowed the onset of the cardboard box was fired: Gifford Pinchot, the first chief of the United States Forest Service, was fired by President William Howard Taft. Pinchot had opposed Taft’s newly appointed Secretary of the Interior, Richard Ballinger, who favored commercial exploitation of federal reserve lands.
During President Theodore Roosevelt’s term, Pinchot had help enable policies for the conservation of natural resources. Roosevelt had designated millions of acres to protect as National Forests. That legacy was threatened, so Pinchot pressured Taft to remove Ballinger from office. In November of 1909, Collier’s Magazine had created a scandal when it accused Ballinger of shady dealings in coal lands in Alaska. When Pinchot criticized both Ballinger and Taft, the president reacted by firing him.
“Food is simply sunlight in cold storage”*…
Increasingly, as Patrick Sisson explains, that’s literally true…
If you had to identify a specific type of real estate that has seen its value increase because of changing consumer eating habits, global demographic shifts, worldwide pandemic preparedness, and US export policy — while its importance to reducing global carbon emissions and adapting to climate change rise in tandem — refrigerated warehouses may not be your first pick.
But there’s a strong case to be made that the expansion and evolution of the cold-storage industry — often called the “cold chain” — will play a significant role in energy, environmental, and economic news in the 21st century. Cold storage facilities aren’t fun places to visit; some are kept so frigid, at minus 50 degrees Fahrenheit, that the workers who toil in these windowless spaces rotate in 15-minute shifts, despite their heavy protective gear…
… refrigerated warehouses are great to build and own. Investors and developers expect 8 to 10% annual growth in this specialized real estate, according to Adam Thocher, SVP of Global Programs and Insights at the Global Cold Chain Alliance (GCCA). That’s made it a profitable real-estate niche…
The ability to more easily cool and freeze food for storage, preparation, and distribution has revolutionized grocery shelves, home cooking, and restaurants for decades, and will continue to do so for years because it taps into every trend all at once. Growing fast-casual restaurant chains, last-mile delivery, a surging global middle class seeking more protein, and the explosion in healthy, organic produce and industrialized frozen food, all need cold storage…
The pandemic accelerated these trends, spiking frozen-food sales in the US to over $74 billion in 2023, a $10 billion increase in just three years, and leading to a wave of refrigerator purchases by Chinese consumers. The need to refrigerate Covid vaccines underscored how important these sites are to global health. Even Ozempic and similar blockbuster anti-obesity drugs need to be stored at 46 degrees F. And the rest of the world is increasingly asking why, if you can always get a Granny Smith apple in New York, can’t you get one in Beijing or London?…
The GCCA estimates there is at least 7.4 billion cubic feet of cold storage worldwide, and 3.7 billion in the US alone, but that’s a vast understatement, Thocher said. The alliance only looks at partial data from 92 countries (not including China) and governments tend to be cagey about sharing his kind of data because of economic and food-security concerns, since these sites are crucial parts of food infrastructure and can reveal levels of economic activity…
Food security has become a global challenge with a growing population, Peters said, especially since roughly 30% of global food production is lost, making increasing supply and reducing food waste imperative. That’s extremely tricky when the critical loss of arable land and desertification, due to climate change, strengthens the case for cold-storage warehouses, which, because of their vast energy use, contribute to that very problem. A 2023 Columbia University study found the sector responsible for 3.5% of total global emissions. The cold-storage industry has responded with more energy-efficient designs and less harmful ammonia-based refrigerants, but it adds an additional challenge to efforts to ramp up sustainable energy production.
“This is a real system-level challenge, a wicked problem,” [Toby Peters, professor of the cold economy at the UK’s Birmingham Energy Institute] said. “My exam question is, how do we feed 9 billion people while economically empowering 400 million small farmers, all without using diesel?”…
Diets, demographics, desertification are all fueling “The Hot Business of Cold Storage,” by @patrickcsisson in @sherwood_news.
* John Harvey Kellogg
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As we chill, we might recall that it was on this date in 1903 that Carl von Linde received two U.S. patents for his Linde oxygen process and associated equipment (Nos. 728,173 and 727,650). Linde had already invented the first industrial-scale air separation and gas liquefaction processes, which led to the first reliable and efficient compressed-ammonia refrigerator (in 1876).
In 1901, Linde had began work on a technique to obtain pure oxygen and nitrogen based on the fractional distillation of liquefied air. His 1903 patents were steps in that direction.
Linde founded a company to commercialize access to these pure gases. Now known as Linde plc (but formerly known variously as the Linde division of Union Carbide, Linde, Linde Air Products, and Praxair), it has become the world’s largest producer of industrial gases– and ushered in the creation of the global supply chain for industrial gases that serves the global cold chain.
“Conceal me what I am, and be my aid for such disguise as haply shall become the form of my intent”*…
Jurisdictional triage…
The website for the shipping registry of Eswatini (formerly Swaziland), established in October 2023, appears much like those of more established seafaring nations. A picture of vast cruise ships sits alongside promises of the “highest quality ship maritime services and ship registrations”. Delve deeper though and Eswatini’s nautical credentials start to unravel. For one thing, the African country is landlocked, calling into doubt the assertion that the port of Mbabane, Eswatini’s capital, is situated on the coast of South Africa. It is a “dry port”, 150km from the sea and 30km from a rail link to Maputo on Mozambique’s Indian Ocean coast. Its stated ability to handle “containers, bulk carriers and tankers” seems questionable.
The country is following in the wake of other smaller nations that offer their flag to shipowners. Seagoing vessels are obliged by maritime law to fly a flag of a country of registration and stateless vessels are not protected by international law. Yet the days when the stern of a ship would fly a national flag connected to the ownership of the vessel are long past. Liberia, Panama and the Marshall Islands now account for nearly half of the global fleet, by tonnage. Countries with loose ties to seafaring have been dubbed “flags of convenience” for levying low or no taxes and offering an escape from burdensome labour laws and other regulatory requirements. Often administered by private companies based elsewhere, these registries are a handy source of additional revenue for small and poor countries.
Registering a merchant vessel with a jurisdiction that is a mere speck on the map is not necessarily a cause for concern. Many take seriously their responsibility to oversee adherence to the rules and regulations of the high seas. Liberia’s, based near Washington, dc, has a good record of maintaining global standards across its fleet. Other registries merely give a “façade of legal oversight” says Richard Meade, editor of Lloyd’s List Intelligence, a trade publication. A blacklist complied by Paris mou, an organisation that aims to “eliminate the operation of substandard ships”, puts the likes of Cameroon, Vanuatu and Comoros near the bottom…
…
Less diligent registries are helping to fuel the growth of a “dark fleet”—some 1,400 vessels, according to the Atlantic Council, a think-tank—that operates with little regulatory oversight. They are mostly oil tankers that engage in subterfuge to hide where they are and the origin of their cargo in order to evade sanctions on Russian crude oil. Ownership is often opaque. Mr Meade estimates that 12% of the global tanker fleet is now dark. He notes that Gabon’s registry, now comprising 140 vessels, is the fastest-growing in the world thanks largely to the reflagging of Russian tankers.
An expanding dark fleet poses a danger to itself and other vessels. Dark ships tend to be old and less well maintained, and some may be uninsured. Practices such as turning off or “spoofing” location devices are a danger to other ships. Swapping oil cargoes at sea to obscure their origins poses the danger of a spillage. Mr Meade foresees a worse calamity of a large “dark fleet” tanker sinking in an environmentally sensitive area, with no accountability…
Sea-going chicanery: “Why does landlocked Eswatini have a ship registry?” (gift article) from @TheEconomist.
* Shakespeare, Twelfth Night
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As we deconstruct disguises, we might recall that it was on this date in 1617 that Sweden and the Tsardom of Russia signed the Treaty of Stolbovo, ending the Ingrian War and shutting Russia out of the Baltic Sea… until 1703, when Peter the Great won back access in battle with the Swedes– a victory he cemented by founding St. Petersburg.
“As people who deal with the ocean you must see the irony. We are facing a shortage on a planet whose surface is covered two-thirds with water.”*…
The Panama Canal has become a vital link in the web of global trade, especially that trade that connects Asia and the U.S. U.S. commodity export and import containers account for 73% of Panama Canal traffic, representing about $270 billion in cargo. That trade is now constrained, as water shortage has reduced the Canal’s throughput…
For months, the global shipping community has been closely watching the Panama Canal, as a severe drought has threatened water levels and forced the Panama Canal Authority to enact restrictions on the maximum weight and size of vessels that can transit its waters. The impact of the Panama Canal Authority’s restrictions has been negligible, as lower shipping demand offset any vessel weight restrictions–until now…
It takes almost 200 million gallons of water for every ship to transit the Panama Canal. And, in a drought, that’s become a problem. The Panama Canal operates with a lock system that is fed via freshwater drawn from Lake Gatun. The water flows from the lake, the high point of the canal, down through the lock system and is then discharged to sea. While the canal’s newer locks can recycle about 60% of its water, it still requires a tremendous amount of water for every ship to pass through.
At this time of year, the lake’s average water level should be around 87 feet, but the lake currently sits at 81.8 feet and is forecasted to remain at or near that level through January. To make matters worse, the lake is only receiving 70% of the intake it needs (largely from rain) to satisfy the canal’s water usage.
To combat this, about a year ago the Panama Canal Authority began limiting the draft of vessels (the distance between the waterline and the deepest point of the boat) that are using the canal. The current draft limit is 44 feet (from a normal 50 feet). A lot of factors influence the draft of a vessel but the number one factor which can be controlled most readily is the vessel’s weight. For every one foot of draft reduction, a container ship has to reduce its weight by the equivalent of 300-400 TEU (at 14 tonnes of cargo). Therefore a six-foot reduction in draft equates to 1800-2400 TEU of reduction in vessel capacity.
As the reduction in vessel draft proved to not be enough to manage Lake Gatun water levels, the Canal Authority began to limit the daily transits of vessels. The canal normally sees 34 planned transits per day. This has been reduced to 24 transits and is forecast to reduce to 18 by February 1, 2024…
“What You Need To Know About the Impact of the Panama Canal on Global Logistics”
Consequently, shipping companies are faced with a thorny choice: They can risk waiting for days, pay a big fee to jump the line (currently running at $4-4.5 million per passage), or avoid the canal entirely by taking a longer route… any of which increase the cost of transit– a cost that likely to show up in prices…
… Shipping companies are set to incur heavy losses due to the bottleneck. Maersk, which is the second-largest shipping company in the world, said it was working to ensure the backlog did not disrupt its deliveries. “We follow the guidance from the Panama Canal and adapt our intake on relevant services in advance of the departure at origin. Maersk remains committed to minimizing disruptions to our operations,” it said in a press release. The Danish company moves more than four million TEU (Twenty Foot Equivalent Unit) vessels every year. In 2021, it saw its revenues reach $62 billion. Maersk added that the low water levels in the Panama Canal were a stark reminder of the climate crisis, and its ripple effect on global supply chains.
There is still no estimate of how much the Panama Canal jam will cost shipping companies, but the situation is a reminder of the 2021 crisis in the Suez Canal in Egypt. In that case, shipping companies suffered multi-billion dollar losses when the Ever Given container ship got stuck and blocked access to the canal…
“The economic impact of the Panama Canal jam: Inflation and shipping losses“
Capacity is down; time-to-market is up; and costs are rising: The Panama Canal is under environmental pressure.
See also: “Drought Saps the Panama Canal, Disrupting Global Trade” (gift article).
* Clive Cussler, Blue Gold
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As we deal with drought, we might recall that it was on this date in 1982 that a soil sample taken in Times Beach, Missouri, was found to contain 300 times the safe level of dioxin (c.f. Agent Orange). A byproduct of the manufacture of hexachlorophene (banned in 1972) by NEPACCO (the North Eastern Pharmaceuticals and Chemicals Company), the dioxin was meant to be stored securely onsite, but was eventually improperly disposed of in a trench in the facility, and by a local waste handler.
Times Beach– well over 2,000 residents– was completely evacuated and relocated early in 1983. The land that was once Times Beach is now Route 66 State Park. One building from the town still exists: the park’s visitor center was once a roadhouse from Times Beach’s glory days and was the EPA’s headquarters for the area.
“Freight mobility and movement, while not a sexy policy issue, is a highly important one”*…
… and a hugely profitable one. Shipping rates, which have contributed to inflation, are coming down– but remain high– and massively profitable for carriers…
The results are in. The container shipping industry earned profits of $58.9 billion in the third quarter, breaking a streak of seven straight record quarters for the sector and further confirmation that the industry’s earnings peak is now firmly in the rear-view, according to industry veteran John McCown.
While the $58.9 billion profit is 22.4% higher than the $48.1 billion profit from last year’s third quarter, it is 6.6% lower than the “mind-altering” $63.7 billion earned in this year’s second quarter, making for a slight sequential earnings downturn that is expected to continue in the months and quarters ahead as aggregate overall pricing in the sector continues to ease, McCown said in his latest container shipping quarterly report…
Throughout the pandemic, container shipping has benefitted from significant price increases across most lanes as strong consumer demand combined with widespread port congestion drove freight rates to records.
“The sharp upturn in the quarterly bottom line performance of the container shipping industry over the last two years is one of the most pronounced performance changes ever by an overall industry,” McCown writes. “It comes on the heels of results in the more than ten years following the financial crisis and preceding the pandemic that results in a negative overall bottom line. The container shipping industry has literally gone from being at the bottom related to overall industry performance to being at the top related to overall industry performance.”
McCown attempts to put the container shipping’s recent performance into perspective by comparing the industry’s profits to FANG, an acronym he uses for Facebook, Amazon, Netflix and Google.
“Container shipping industry profits were 14% higher than total FANG profits in 4Q21, 103% higher than FANG profits in 1Q22 and 145% higher than FANG profits in 2Q22. For 3Q22, that gap has expanded even more as container shipping industry profits have swelled to being 158% above total FANG profits.”…
The invisible behemoth– container shipping, from @MikeSchuler.
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As we contemplate containers, we might recall that it was on this date in 1860 that the slave ship Erie was sold at government auction at Red Hook, Brooklyn:
The ship was sold, after being captured and impounded by the US Government, for enslaving and importing Africans, a business banned by the federal government under the Piracy Law of 1820, which followed The Slave Trade Act of 1794, two steps in the USA’s long, slow process of devolving and banning the slave trade (the shipping of captured people) and slavery. Slavery was finally banned in 1865. The case of the ERIE was chosen by a US Attorney, a judge, and by President Lincoln himself to signal a major change in policy on slavery and their commitment to end it.
The owner and captain of the Erie, Nathaniel Gordon of Maine, did not get off free as was usually the case. He was tried and found guilty of running a slave ship – and the Piracy Law of 1820 said the punishment was execution. Gordon’s supporters, including members of Congress and even friends of President Lincoln, sought a presidential pardon; but Abraham Lincoln refused due to his conviction that a point about slavery needed to be made with the ERIE and Captain Gordon.
Captain Gordon was distressed, in jail, and attempted suicide. He was resuscitated and was hanged at the Tombs in Manhattan and became the first – and only – importer of slaves to be executed for the crime in the USA. Soon after Gordon’s execution, Abraham Lincoln presented his first draft of the Emancipation Proclamation. Several months later, the Proclamation was finalized, followed by the 13th Amendment which abolished slavery.
Slaver Captain Arrested – Ship Sold at Auction in Red Hook – 1860
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