hahah I legittimately wondered what happens to these guys. Those breaking yards are less than ideal places to be walking through. If someone knows how the crew gets off these ships afterwards please let us know.
SUMMARY: Ships are not making much money during the pandemic while the price of iron skyrocketed due to China's infrastructure building during the pandemic. You're welcome!
@@johannmuller3711 nope, China is smart they know they cannot come even close to Us in military power so they are using economy and technology to defeat them and it's working good for them. China's main goal is to secure only South China Sea that's why they are increasing there naval power. They'll use 'one belt one road initiative' to assert dominance. That's why they are investing trillions on this project.
Your all too soft and squishy think about how many Chinese lives are saved, and the ocean life being killed by the cutting down on Crude These thing pump.....................
As a former seafarer there is a tail risk from this pandemic that I think few consider. During the Covid-19 pandemic almost no countries were willing to take in disembarking crewmembers and thus many ships hade problems carrying out crew changes. I’ve heard stories of crewmembers ready to go home when the lockdown started. They stayed onboard for months. Some missed their weddings, births of their children, family members dead and buried without them being able to be there. Many will never return to the sea, some will have PTSD from this period. A global lack of seafarer can really halt the global economy. They are truly unsung heroes.
@@thelastaustralian7583 Automation can only go so far. Sure it might replace or heavily augment the deck side, but the engine room will still need skilled engineers to maintain it. An AI can't fix a jammed valve that is cutting off your coolant water to your main engines. And if the ship blacks out, the AI goes with it.
Seafarers include chefs, photographers, cleaners, entertainers, engineers, mechanics, salespeople, beauty therapists...... AI can maybe steer But yeah I’ve got a few friends who’ve had to make some major career detours
@@benlarson9775 The thing here is tho, the technician won't be the one choosing if the ship needs him or not. It's a guy in a suit on the NYSE who can't pick that boat out of a lineup let alone tell you how one works. AI can replace nearly everything and the part's it can't will become the only area where companies can "cut overhead". AI will take more jobs than just the ones it can actually replace.
@@kullen1041 It makes some sense. If people could come up with efficient sail setups using only old-timey technology, I image we could come up with something using modern materials and technology that could at least increase the fuel efficiency of current engines using sails.
The name of this channel should be "economics confused and wrong" He has obviously never heard of the concept of malinvestment and the term "market distortion" The fact that China is malinvesting so much resources that it has distorted the steel market to the point that ships are worth more in scrap value than to keep them, even with a downturn is not "good policy" or "big brained"
And the stupidity of making far too many ships was exacerbated by the Federal Reserve Board when it kept interest rates near zero thereby tempting the greedy to open their orderbooks for more ships.
@@kathieharine5982 And why would you think the monetary policy of the United States we drive shipbuilding by other countries? The United States doesn’t have a large merchant marine.
@@neilkurzman4907 Where do you think the zero interest money ends up? It has nothing to do with the small size of US flagged ships. Just examine where ships are financed. Follow the money.
@@kathieharine5982 So you believe the United States finances the entire shipping fleet of every country in the world? I am certainly not going to say that low US interest rates doesn’t create some perverse incentives. You did not describe how you know that this is one of them. Follow the money? Certainly why don’t you lead me.
Here's a question, is china scrapping its own ships as well, or are they aiming to control the shipping market by blinding their competitors with short term profits?
@@jwadaow you de man. Keep repeating the truth for the Enemies who have hidden themselves among our politicians, will try and lie that the economic disaster isnt caused by their lockdowns.
In Germany, retailers are warning that there are not enough goods and to start buying Christmas presents early. I think that has something to do with your video topic. I am impressed that you have virtually predicted this.
@@alitlweird Because there is no such thing. The entire purpose of government is to benefit the politically connected at the expense of everyone else. There is no rational incentive for them to act "responsibly".
Kinda not surprised to see this. In a way, its overdue, just due to the costs of running these fleets. The timing is opportune; scrap the old , inefficient ships for cash, cut down on labor costs, plan and build more efficient ships. This puts money into the hands of shipbuilders, stimulating local economies, the fleet operators can be more profitable in future as well as seeing efficiency gains, plus China gets its iron fix. Or something like that....
cyclonicleo kind of like when we everyday people upgrade our 20 year old cars that have done over 250K KLM, it becomes too expensive to maintain, when you can get a new or newer car for the same amount of money that it costs to Maintain the old one.. Even if you buy a 5 year old car with 80-100K km, the original owner can afford to go to a car dealer and purchase a new one again.
@D R no. there was some random suggestion by a chinese billionaire to build a canal through nicaragua which was in no way supported by the chinese state, but all western media is like "china wants to build a canal through nicaragua"
It'd be great to see a breakdown of the types of goods that have dropped in demand and those that have spiked over the past year. Obviously more people than ever are shopping online and tons of things are still being shipped from China and elsewhere, but I assume the demand for heavy industrial goods, vehicles, raw materials, etc. has dropped and hasn't nearly been offset but the increase in online consumer sales.
10:55 because shipping companies will receive more money for the steel from scrapping their ships and not continue to pay millions in crew costs, insurance, maintenance etc Saved you 11mins. You're welcome.
Switzerland is actually a quite bad example of a landlocked nation in this scenario. Basel is directly connected to the major port of Rotterdam by the Rhine river, and the Swiss merchant marine is the largest of any landlocked country.
These massive boats that are more efficient at shipping, are not going to go down the Rhine. So, the cargo from them will have to be transfered to smaller ships... that's another overhead that's a disadvantage.
@@sunnyjim1355 Oh absolutely, I agree. But the Rhine river happens to be a extremely busy waterway, connecting Basel, Cologne, Dusseldorf, the Ruhr and Arnhem to the sea. In fact, interfacing between river and sea is the basis for most of the world's busiest seaports (eg Alexandria, Antwerp, Rotterdam, Hamburg, Shanghai, South Louisiana, Tokyo).
I've been a merchant mariner for 27 years. Sailed every where I wanted to go. Industry isn't dead yet. Depends on where you work and the type of vessels. Oil field is slow and towing isn't much better. Survey is still going pretty well. Pay has been drastically reduced but I'm comfortable making 80k for 6 months of work. Being a licensed Chief engineer for the last 20 years has been fun, but unless you are ready to be gone and miss just about every holiday do your research. It's not for everyone.
I clicked on this video semi-reluctantly, as I didn’t think it sounded that interesting. But this was fantastic! Love all the connections you pointed out, how one decision on one side of the world leads to consequences on the other side. Great channel!
I love how we've gotten to the point where the sensible basics of sound economic policy, such as government investment in infrastructure in times of crisis, are "big brain" moves now.
@@jakemocci3953 Actually, I remember Trump talking about infrastructure quite often when he was running for presidency. Not that he's done a lot to actually improve it tho.
I liked the presentation, I want him to take this further and explain the risks of infrastructure, housing, tariffs, etc. however investing in infrastructure itself is a risk or else China, Japan, Europe would do it in earnest... you see China is paying premium now for something they could have done on the cheap 5-10 years ago, with a huge reduction in global demand and investment the consequences of maintenance and lack of economic growth can make this move a disaster in the next 2-10 years if they miss the mark, the same could be said of housing, tax adjustments, farm subsidies, even wars, etc. etc. So he perhaps overly summed it up as big brain, and chuckled at Australias housing plans, (or the USAs cash in pocket plan,) but we will see.
China has a big advantage in this stuff though, which is that they have a relatively cooperative form of government that doesn't include an adversarial planning process. In the US, the regulators are always trying to kill you. They also have much more rational decison-makers than America does, and would understand subtle nuances like the advantages of freeways over high-speed rail when connecting Cleveland with Columbus (in their case, Qinzhou with Chongzuo, as those two cities in far Southeast China you've never heard of are about the same size and would have a similar economic relationship) or what a cost-benefit analysis is.
@@EconomicsExplained well considering alot of older ships runs on heavy fuel oil (or diesel, depending on route), and have inefficient engines, i have to say that from the perspective of ONLY clean air, not including the pollution from ship breaking, scraping old ships are a good idea.
@@relife6764 Sad thing is though, after the pandemic passed (and we are beginning to see it at least in the developed countries), demand for crusie ships will eventually raise again, and manufacturing of new cruise ships will spike, producing a sudden surge of carbon emissions from power generations and transportation of resources. Edit: not just cruise ships, ocean liners and such, just, all kinds of ships.
It's a bit more complicated, of course. It's safer to scrap now then build new in case the demand comes back than take a risk maintaining currently useless ships that would keep losing value even without work. Look at a bright side: shipyards now have a chance to get more money from shipping companies in the future - some spike in demand for their services will probably occur. Not to mention the current demand for scrappers who get a lot of work right now.
@@neilfrasersmith need money buy goods, stores need money to order stock... globalists are trying to break the system by attacking the logistics while crushing incomes.
Yup. Chittagong, Bangladesh. You can thank us for taking up so much of our beach to recycle the whole world's ships instead of building expensive beach resorts
The other important part about the economy of using ships is their operation also benefits from globalization. They have flags of convenience, pay minimal taxes, have cheap labour, and can be scrapped where there are few labour or environmental regulations.
Communism. Don't be fooled, stimulus packages are simply Communism. The Federal Reserve is rapidly seizing the means of production via monetary inflation into the share market. The next depression will be far greater than the first.
Yeah that's actually true. Switzerland's handicap in manufacturing is an excessively strong currency that makes it more expensive to buy their goods outside of Switzerland than within it, and also makes everyone elses goods cheaper in Switzerland, not a lack of maritime access.
This Chanel has the best economic discussions Iever heard in my life. All topics are developed so elocuently and taking into account the most important factors. Something that seems easy to do, but that very few acomplish. I really liked it
scrapping ships (oldest) has probably also reduced a lot of expenditures on upgrading engines on them related to IMO2020 requirements on fuels/scrubbers. Where some of the oldest may have been bunkering in the newer low sulfur MFOs, they can now skip that premium and build new ships with state of the art engine systems - not having to take an active asset out of service for a year or more to refit in the process - they can sit on the cash and be planning instead...
I've been a merchant mariner for 27 years. Sailed every where I wanted to go. Industry isn't dead yet. Depends on where you work and the type of vessels. Oil field is low and towing isn't much better. Survey is still going pretty well. Pay has been drastically reduced but I'm comfortable making 80k for 6 months of work. Being a licensed Chief engineer for the last 20 years has been fun, but unless you are ready to be gone and miss just about every holiday do your research. It's not for everyone.
I wouldn't worry about it...we will always need ships to move people and goods. It's just going through a transformation, which happens in every industry.
That doesn't concern the shipowner. He gets paid once he delivers the vessel to the breaker yard. There are even specialized traders that buy ships for scrapping and pick them up anywhere in the world, pay the owner and sail it to Turkey or Bangla Desh or somewhere in Africa where labour for scrapping is cheap and safety or environmental regulations are non-existent. Now, however, the EU has put a stop to that practice and each EU shipowner must show that his (former) vessel is being scrapped in a responsible way or else he risks huge fines.
I left merchant marine as Third Assist engineer after 4 years ,used my savings(saved over 70% of income) put myself thru flight school and 5 years later got hired by major air cargo company. Retired this year, age 59 as 747 captain.
@@thedarkdestroyer5063 That the average person is their own demise by not being smart economically I suppose, because few do what he did. And what he told is also just speaking of, the subject of the video
@@joostsmals640 Too many things to mention, but fundamentally he does not understand how long ships last, the 7 to 12 years taken to depreciate a ship on a shipping companies books, and the relationship between ship scrapping and ship building. Ships last between 10 and 20 years depending on the type of ship and physical and economic obsolescence. They do not last 40 years. Every year something like 5% of the world's feet is scrapped and 5% is replaced. If more ships are scrapped than are built obviously the fleet will shrink. Ship owners bet on future growth of trade and on the ability of ship builders to add vessels to the fleet. What the "economist" finds so alarming is part of a recurring cycle.
@@EconomicsExplained But it is a perfect time to watch this kind of videos in western Russia - 5pm here. At least for a quarantined student like myself
I live near that area, *Chittagong shipping graveyard* . The pollution here is off the chart. These third world countries have literally become the dumping ground ,global trash can of the first world countries luxurious lifestyles. Our area is getting the first hand experience of global warming. It's not sustainable. Sooner or later this lavish life style will backfire greatly in the near future.
A lot of the pollution is probably the result of limited local regulation of the these areas (which unfortunately is probably why such areas are chosen l) and isn't necesarily inherent to the excessive waste of first world lifestyles.
I'm sorry to hear that, God will be taking note of 'those destroying that part of the earth' the Bible promises to 'destroy those destroying the earth' in the very near future, he will also restore earth & it's inhabitants to perfection. 🙏🌎👌
U won't need to imagine it... your going to see it. And FYI it's not being done out of greed. We are being culled my friend. Lock down was designed to wipe out independent business so corporations can boom in wealth so they can then weather the storm of the great reset. Then after body count will really start to boom. All planned decades ago
20% increase over the last year. Jacinda said they cant go up for ever and then printed up another 28 billion for more low interest loans. She may be pretty buy she is dumb AF.
@@bubblegumgun3292 Building roads and bridges that aren't needed isn't capitalism (or socialism). If you are building something for the purpose of employment and stimulus, you are by definition not building something because it is needed.
Yea this guy thinks that making housing less affordable while robbing people of their savings is somehow "responsible" economics? He obviously doesn't understand the first thing about economics. His channel should be renamed "Lies that government wants you to believe".
China builds poor quality infrastructure it breaks down after 2 decades. And you do realize since China is an authoritarian state it has the ability to control its market. In reality It’s not as good as you think.
@@blogengeezer4507 In other words like talking about some people who are crazy enough to speed with the absolute delusion of conviction that they believe they have a fool proof breaking systems fitted in their vehicles for keeping them safe & secure no matter how fast or far they take their freedom! Right? .. EXCEPT NOT EVERYONE'S GROWN UP AND MATURE ENOUGH TO HANDLE SUCH A DELICATE COMPLEXITY AS ABSOLUTE FREEDOM WITHOUT SECURITY / CONTROL! You really don't want to put that kind of hope & faith in all of crazy humanity.. 🍷
@@cloutmastermemes2007 l don't have notice of any other authoritarian regime worst than United States of England . There isn't a single Latin American country that hasn't suffered with dictatorships implemented by the CIA . The same in Africa , Asia and Middle East . If it's not authoritarianism , my grandpa is a bycicle . Salute from Brazil .
California is leading the infrastructure way with its high speed rail to nowhere and converting EVERYTHING to non-fossil fuel energy sources. They can always supplement their energy needs with wood from the forests which are burning anyway with great regularity. However they probably would not be smart enough to harvest the wood that grows close to where people live and work. Will Rogers said, "When the Okies left Oklahoma and moved to California, it raised the I.Q. of both states." (I absolutely love that quote.)
A big cost for merchant fleets is they must go green and cut emissions down starting 2021 in addition to become for efficient and cut other costs.This was pre-covid. Only the big guys can survive.
you got the point. regarding the emission rules will be valid in 2021, the old-tech vessels will be prohibited while new vessels with less CO2 emission have been built for replacing those old ones therefore there have been excess container vessels in the market causing fleet price to decrease. with more cost - less profit , i still be in doubt how they withstand.
I for one see most of this Global Warming as a pack of pure 💩. I grew up with the cries of the same sorts whining about the Millennial Ice Age coming our way. Then low and behold decades later (August 2020) the scientist leading the charge publishes his apologetic reaction saying he was 😑 wrong. Awww Gee. Probably seeking some last glimmer of notoriety. Anyways one of the few things I agree with in all this is the amount pollution you find in bunker oil. It’s really nasty,on a grand scale. I think I read someplace it was on the order of 2500 x as dirty as gasoline. Here in the North Country many institutions military bases and such all ran on that stuff via a big steam central heat plant. Most if not all have been modernized to diesel / HHO or done away with in favor of natural gas. I saw a couple documentaries showing quasi modernized ships running bunker and diesel the diesel being required for near shore operations. I can see where that ramps up the costs and they made a big show of that in the documentary. Sign of the times I guess. It’s probably just good financial sense to start over with new compliant gear. The world moves on.....
@@drizler also I think diesel is better for the engine then bunker oil. It sounds to be that bunker oil really clog up the engine components faster then diesel does and soon we will go over to biodiesel that is even better then regular diesel
Before finding out, I say besides taking out a few key parts is that when you have layers of steel welded together, it becomes way too costly to tear it apart as opposed to mining iron ore and making new steel.
Sustainable ship recycling is a must nowadays. Shipbreakers in developing countries should be able to implement ship recycling plans without incurring significant costs. A good idea might be that the entire shipbreaking process is carried out on a specially constructed bed rather than a muddy surface. By the way, great video Economics Explained! Very interesting, looking forward to the next one.
I thought the same thing, but wasn't too sure if he was referring to the boat he was on. After doing a short research this is what I found out "Carnival Cruise Lines announced July 23 that the 1995-built Carnival Imagination would be placed in long-term layup, with no immediate plans for it to re-enter the fleet. On August 26, the ship officially embarked on its last journey, sailing from Willemstad, Curacao, to Aliaga, Turkey, where it will be broken up." According to Marine traffic Aliaga Turkey was the last port he was reported to be at. Too sad, it was actually the first cruise I got on.
should be $200 per gallon. limited resources should be the most expensive things and continue to get more expensive. but it's the same all around the world, comfort creatures not willing to accept responsibility are ruining the world for generations to come.
Bro you will learn so much more about economics if you actually pay attention to a collegiate level economics class than watch his videos. Believe me, I LOVE this channel, but he definitely dumbs down certain things for his viewers. Not saying it is a bad thing, but school, books, and research papers are what provide you with the same knowledge he has for economics not TH-cam videos.
@@davidmccullough3278 LOL. There have been many studies about what the average student remembers from their Economics Courses. It ain't much. Many (maybe it was the majority, I forget) actually answered basic questions worse after studying Economics than before they took the class.
Wow, not only commercial vessels but even military battleships were limited by the Panama canal. This leads to question, where and how can you scrap some large inventions like battleships and space rockets?
Space rockets? Traditonally you'd scrap them to a bottom of an ocean.. Besides, relative to their cost, the amount of materials put in to them, is once again a rounding error.
The Japanese and the Germans built some battleships that were too wide to pass through the Panama Canal locks of the 1940s. The largest, last US Navy and Royal Navy battleships (the four Iowas and HMS Vanguard) can/could slide into those locks with a few molecules of air to spare.
Wow! I recently 'connected' with this series a couple of months ago. It seems incredibly prescient. For your delectation.....episode 1 ;) th-cam.com/video/XetplHcM7aQ/w-d-xo.html
Hey I’m not sure if it was affected by the time of making this video but I saw you mentioned a cargo ship container would cost around €2200 to ship from UK to Australia. My dad works for a company that does business with China and he told me that they increased the shipping rate of the containers from around three to $4000 a container all the way up to $12-$13,000 per container today. The cost of shipping is actually rapidly increasing because of Covid and the reduced merchant fleets to deliver the product.
Before watching the video, I would assume that with these ships being unable to sail, they still have to be put in port somewhere and there just isn't enough space for them all considering ports weren't built to hold all of them as they were intended to only spend a bit of time there then depart. Also, it would cost money constantly for them to just stick around in port and I would assume with the sudden demand for port access with so many ships needing it, the prices have probably gone up. So ultimately, it would've cost more money in the long term to keep the ships than not to, especially considering that cruises got IMMENSE bad press over how fast diseases spread through them and they've had a lot of news coverage before that for other issues. They probably thought it would take too long for the cruise industry to recover and it just wouldn't be worth it for a long time and is better to just scrap them to get that stimulus of money to do something else with. So now i'll watch the video and see if any of that syncs up. :P
1:03 'I don't burn down my house if a video gets less than 10k likes' 04:20 ' Out of fear of sounding like a Wendover Productions video' I'm not even half way through and your jokes are killing me :'D. GG
There are still lots of jobs. World trade increased year on year, the cruise industry has took a hit but that’s about it. I’ve just qualified as 3rd engineer and found a job relatively easily
They don't own the ships, their debtors do. So why sail around a liability that isn't making money when you can liquidate it and pay back some of the debt?
I've got an old chain link fence and banding wire .. if I band it up to look like a ship ..... maybe I can get that Ferrari after all!! yet another good video.
They aren't :( In fact the number of hijacks raised by 40% compared to last year(IMB Piracy Reporting Centre). The reason is that ships that are still sailing have fewer crew members due to coronavirus pandemic and since there is less demand for ships, the money is running low for the companies, so they cut costs with armed security.
@Europa Europa: Pirates are operating very much in the Bight of Benin (West African coast) 19 seafarers were kidnapped on one day only last week. Doesn't make the news though...... Wonder why?
China is also suffering financial crises, the difference is these don't get exposed because of the tight propaganda the CCP runs. We don't really know the financial state of that country tbh.
@@COUNTVLAIDMIR I think we know quite well the financial potential China has. Unlike our democratic(ish) societies, China has no such constraints and it has an absolutely *massive* workforce, supply chain, infrastructure, military, huge amounts of natural resources, and a perfect location (other than perhaps North America or Africa). Chinese civilians are not going to see the benefits of this, but since the government has basically no obligation to them, China as a country will prosper. What needs to happen is a cultural revolution in China, that will benefit western nations and chinese citizens alike. I foresee that happening, and we'll then see something similar happen in Africa.
@@hunterm9 Any things possible BUT Chinas is a step ahead of most nations , They have always been traders not warmonger's & good at it , They will screw you down & spit you out if your not in there field .
@@andrewthompson5728 ah yes the conspiracy theory brainwashed into you that no Chinese support cpc and that all supporters are 50cent and wumaos😁 since you say I am forced to comment, I guess I'll call you the CIA agent train by Mike Pompeo to lie, cheat, and steal.
James I don't think that with cruise companies trashing their ships right now, that bulk cocaine trafficking was possible at least not since the 1980's. With Carnival at least the restrictions of not allowing the boarding of provisions in foreign ports intentionally makes such a thing near impossible. If you believe that companies can scrap their ships after making big profits in drugs then only cargo ships could do that successfully and this phenomenon is much more than just cargo ships being scrapped. Furthermore "bulk cocaine" requires ship ports in countries with bulk available which is only a few tourist destinations. For the years on board that I had full access to 100% of every space on my ship due to my job position, I would bet everything that company involvement did not happen even once. This scrapping issue is much bigger and much more serious an issue for the world economy. This destruction of ships means something else.
@@matthewkelleyhotmail I don't think he means cruise ships in particular though. The Coast Guard inspections made it highly unlikely any long-term smuggling operations could be sustained, although it was certainly possible to buy drugs in port in _personal_ quantities, and then conceal them.
Acchualleey, cocaine is shipped by the US Treasury, they embue it within the dollar and use Nimitz class aircraft carriers to surreptitiously transport it to Iraq, where military contractors get first dibs
Sooo ship owners collectively reduce their fleet sizes and overhead to reduce supply so once global economy/demand rebounds they can exponentially increase their rates/profits. We the people will pay... GROSS!
This is actually great news. I've said for the last few years that there are simply too many ships and too much tonnage by companies to service the industry. Rates have been so low several companies have gone under, before covid. Other shipping companies would keep increasing their fleets and the problem continued, too much capacity and not enough tonnage to be shipped worldwide even with rediculously low shipping rates of the last few years. Taking older ships out of the business will ease the problem for a bit, but only if they aren't replaced immediately will it solve the problem for the long run.
Connor Ozkrffe 'they are river barges rather than ocean going ships .But half the world's ships are propelled by Swiss engines -Sulzer designed diesels go up to 2700 ton 14 cylinder two stroke cross head design worth power outputs up to over 100000 kilowatts .These propel these huge ships at up to cruising speeds of up to 27 knots .They are huge with the crankshaft up to.over 30 metres long and each cylinder is about 20000 c.c capacity.
There is a big difference between companies registered in a country having financial control of an asset (a merchant fleet in this case), and that same country being able to use the asset itself. The swiss have went the way of supplying high-value/low-quantity products and services (engines, navigation equipment, financing, insurance, etc.) to service this profitable asset, so other companies and countries have to essentially pay them rent to use the asset (to ship stuff in this case). That "rent" can then be reinvested into these industries producing/offering the products and services at even higher efficiencies, perpetuating the cycle. This is basically the strategy for "going tall" with a few valuable industries, instead of "going wide" with a lot of high-volume industries (like China, India and many other neighbours there).
@@SolyomSzava yes the largest ship ownining nation by port of registry is Liberia -must be half the worlds large merchant ships registered in Monrovia .
Very entertaining and informative. This isn't something I would normally watch, but you managed to make a boring subject like economics fun and interesting to watch. I actually enjoyed watching.
This is yet another indicator of the bumpy ride ahead. Massive cuts in the ability to ship massive quantities of whatever will affect us all. In some way shape or fashion here in America the avg item on the grocery shelf travels 1500 miles.
Talked to an import/export expert, the shipping companies actually just recently doubled/tripled their rates, as long as it's cheaper than air freight, they can do what they please.
Yup! Perfect excuse to cut capacity and then raise prices. Its not like you have other options! Most of the 2000s was spent building tons of shipping capacity, and drilling for oil as well. Oversupply caused prices to go down for both. I work in maritime shipping and see the container rates creeping upwards.
yeah but the rhine, from I've seen when I was over there, is pretty narrow and shallow at a lot of points, at least in the area i saw at the swiss-austrian border. doesn't seem suited for mass freight
The Rhine does exactly the same for Europe as the Mississippi and Ohio rivers does for the US, exporting/importing to the central regions of each continent.
It hurt my brain when you said “go brrr” in the middle of this otherwise super professional and insightful mini-doc. It was like when your grandpa says “that was rad” to try to sound hip.
A timely reminder that everything you change in the economy changes atleast two other things.
Unless it’s communism, then you can just “pacify” the other problems
Why does it say 20h ago when it just got uploaded a few minutes ago
Get rid of the 22nd amendment. I will stop the destruction of such ships! The ocean is beautiful, but our economy might as well be at sea level
Sounds like a cucked version of Newton's 3rd.
You make very good videos
Imagine being one of those poor guys who have to drive their ship to the scrapyard and make their way back home on foot...
hahah I legittimately wondered what happens to these guys. Those breaking yards are less than ideal places to be walking through. If someone knows how the crew gets off these ships afterwards please let us know.
XD
@@EconomicsExplained Obviously they swim back. What a foolish question. :)
@@EconomicsExplained probably get flew back by the company
@@saasda6255 by the owner’s private jet
SUMMARY: Ships are not making much money during the pandemic while the price of iron skyrocketed due to China's infrastructure building during the pandemic. You're welcome!
It
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thanks bro, you saved me 13 minutes.
Thank you!! It was so much blah blah blah.
Nailed it!
"China is building so much infrastructure that the price of iron has rose over 300%"
flashback from Victoria II
God forbid China westernises. In-game economy be going kaboom.
China is buying all iron scrap in the word to prepare for worldwar nr 3
@@johannmuller3711 nope, China is smart they know they cannot come even close to Us in military power so they are using economy and technology to defeat them and it's working good for them.
China's main goal is to secure only South China Sea that's why they are increasing there naval power.
They'll use 'one belt one road initiative' to assert dominance. That's why they are investing trillions on this project.
@@deshraj669 Africa is under heavy Chinese influence already aswell
That is why you always bully china into explosion
I'm not even a sailor and watching these ships get scrapped still hurts.
more painful for me watching people who scap it in bangladesh
I saw my first real cargo ship cross that final bar, it hurts. I even performed the shutdown of a ship older than that, sister ship to the Al Faro
It reminds me a bit of how aircraft part manufacturers had to buy titanium golf club heads just to get enough of it, back in the 1990s.
@@mal2ksc golf club heads are made out of titanium?
Your all too soft and squishy think about how many Chinese lives are saved, and the ocean life being killed by the cutting down on Crude These thing pump.....................
This must of been the first EE Video that didn’t mention Norway
ahh I will have to do better next time
@@EconomicsExplained I live in norway
Don't worry, when an EE video does not mention Norway, there's always a comment that does. Thank you for your service by the way.
Well I’m not watching it now, thanks for the warning
@@robbiehorninlow1520 😱
As a former seafarer there is a tail risk from this pandemic that I think few consider. During the Covid-19 pandemic almost no countries were willing to take in disembarking crewmembers and thus many ships hade problems carrying out crew changes. I’ve heard stories of crewmembers ready to go home when the lockdown started. They stayed onboard for months. Some missed their weddings, births of their children, family members dead and buried without them being able to be there. Many will never return to the sea, some will have PTSD from this period. A global lack of seafarer can really halt the global economy. They are truly unsung heroes.
AI Seafaring Automation.
@@thelastaustralian7583
People I know now have PTSD and it sucks
TheLast Australian: Let me suggest the option were you are jobless.
@@thelastaustralian7583 Automation can only go so far. Sure it might replace or heavily augment the deck side, but the engine room will still need skilled engineers to maintain it. An AI can't fix a jammed valve that is cutting off your coolant water to your main engines. And if the ship blacks out, the AI goes with it.
Seafarers include chefs, photographers, cleaners, entertainers, engineers, mechanics, salespeople, beauty therapists...... AI can maybe steer
But yeah I’ve got a few friends who’ve had to make some major career detours
@@benlarson9775 The thing here is tho, the technician won't be the one choosing if the ship needs him or not.
It's a guy in a suit on the NYSE who can't pick that boat out of a lineup let alone tell you how one works. AI can replace nearly everything and the part's it can't will become the only area where companies can "cut overhead". AI will take more jobs than just the ones it can actually replace.
The next innovation in cargo shipping: Sails.
I was legit thinking of this halfway through th video😂😂😂❤️, would be great if we figured out how to propel the behemoths across water without fuel.
@@kullen1041 It makes some sense. If people could come up with efficient sail setups using only old-timey technology, I image we could come up with something using modern materials and technology that could at least increase the fuel efficiency of current engines using sails.
@@ZeusTheIrritable for sure
@@ZeusTheIrritable this is currently in the process. Not yet at ships of this size and magnitude tho.
It's called wind power
Han solo: chewy, where's the millennium falcon?
Chewbacca: GGGRRRRRRRRRRRR (in Turkey being scrapped)
“But Chewy She Did The Kessel Run In 12 Parsecs!!!”
@@408Magenta time to scrap star wars. woke trash.
The name of this channel should be "economics confused and wrong" He has obviously never heard of the concept of malinvestment and the term "market distortion"
The fact that China is malinvesting so much resources that it has distorted the steel market to the point that ships are worth more in scrap value than to keep them, even with a downturn is not "good policy" or "big brained"
*Bangladesh actually.*
@@theotherside931 ain't no Bangladesh in my story.
“Out of fear of sounding like a Wendover Productions video” 😂😂
Lol loved that one.
Literally almost forgot this was an economics explained video XD
Wendover do be better doe
Caught this one also.
Best reference
Let’s not forget for the last decade they made WAY too many ships. Scrap ships to raise the low prices!
And the stupidity of making far too many ships was exacerbated by the Federal Reserve Board when it kept interest rates near zero thereby tempting the greedy to open their orderbooks for more ships.
@@kathieharine5982
And why would you think the monetary policy of the United States we drive shipbuilding by other countries? The United States doesn’t have a large merchant marine.
@@neilkurzman4907 Where do you think the zero interest money ends up? It has nothing to do with the small size of US flagged ships. Just examine where ships are financed. Follow the money.
@@kathieharine5982
So you believe the United States finances the entire shipping fleet of every country in the world? I am certainly not going to say that low US interest rates doesn’t create some perverse incentives.
You did not describe how you know that this is one of them.
Follow the money? Certainly why don’t you lead me.
China made too many ships, they dumped them on the market to gain market share and close western shipyards.
Wow, in the subtitles it actually said "twice as long and twice as Thicc" Amazing attention to detail!
Here's a question, is china scrapping its own ships as well, or are they aiming to control the shipping market by blinding their competitors with short term profits?
Very very good question! And the answer is probably YES!!!! They are building ports all over the world!
Let’s play Bingo.
Bingo, you win!
Also they are building a massive Navy
That’s a smart move ngl
probably takes a month to make a ship. if the shipping market came back with that much demand it wouldnt be hard to get back in.
Clever question
"10 short months ago..."
Imma stop you right there...these are 2020 months.
How many years has it been 2020 now?
@@leandersearle5094 I know not, I merely survived the age of September knowing winter was coming.
Imagine thinking that the pandemic's unfolding disaster wasnt caused by the Politicians.
@@TheBelrick No can do.
@@jwadaow you de man. Keep repeating the truth for the Enemies who have hidden themselves among our politicians, will try and lie that the economic disaster isnt caused by their lockdowns.
04:19 Trolling Wendover Production lol
Haha no troll, just don't want to encroch on my man sams territory, he has transport, RLL has corolla's, I have Norway
@@EconomicsExplained xD bruh 😂
@@EconomicsExplained XD
@@EconomicsExplained Gib me Norway too
Dividing up the world i see, i well and truly expect nothing less than in 30 years you guys being on the board of shadowy figures running the planet
In Germany, retailers are warning that there are not enough goods and to start buying Christmas presents early. I think that has something to do with your video topic. I am impressed that you have virtually predicted this.
9:00 You lost me at "Responsible governments will..."
Lost you? Why’s that? There’s like two or three responsible governments. (maybe)
@@alitlweird Because there is no such thing. The entire purpose of government is to benefit the politically connected at the expense of everyone else. There is no rational incentive for them to act "responsibly".
@@alainduncan3756 You are 100% right
Was he being sarcastic when he said the incentives for the Australian government to continue funding the housing market won't end badly?
@@SamuraiUjio absolutely
Kinda not surprised to see this. In a way, its overdue, just due to the costs of running these fleets. The timing is opportune; scrap the old , inefficient ships for cash, cut down on labor costs, plan and build more efficient ships. This puts money into the hands of shipbuilders, stimulating local economies, the fleet operators can be more profitable in future as well as seeing efficiency gains, plus China gets its iron fix. Or something like that....
You sir are totally right.
cyclonicleo kind of like when we everyday people upgrade our 20 year old cars that have done over 250K KLM, it becomes too expensive to maintain, when you can get a new or newer car for the same amount of money that it costs to Maintain the old one.. Even if you buy a 5 year old car with 80-100K km, the original owner can afford to go to a car dealer and purchase a new one again.
"simulating local economies" = simulating china, japan and korea
@@timwaagh It takes years to design and build a new series of ships. They are betting that the market will be going again by then.
I agree with your comment and never needed to watch the video
Correction that there is a “New Panamax” class that takes advantage of the new, larger locks at the canal. Goes up to 366m
I didn't hear new panamax mentioned in the video. It basically makes old panamax obscelete. Did I just miss it?
@@christopherwaugh690 Video did not mention "New Panamax"....hence my comment :)
@D R no. there was some random suggestion by a chinese billionaire to build a canal through nicaragua which was in no way supported by the chinese state, but all western media is like "china wants to build a canal through nicaragua"
It'd be great to see a breakdown of the types of goods that have dropped in demand and those that have spiked over the past year. Obviously more people than ever are shopping online and tons of things are still being shipped from China and elsewhere, but I assume the demand for heavy industrial goods, vehicles, raw materials, etc. has dropped and hasn't nearly been offset but the increase in online consumer sales.
10:55 because shipping companies will receive more money for the steel from scrapping their ships and not continue to pay millions in crew costs, insurance, maintenance etc
Saved you 11mins. You're welcome.
China needs steel, probably to build up their military.
@@CanadianArchaeologist or their own merchant fleet
Can we please vote this comment up to the top!
Ships are built to make profit not to make costs.
Switzerland is actually a quite bad example of a landlocked nation in this scenario. Basel is directly connected to the major port of Rotterdam by the Rhine river, and the Swiss merchant marine is the largest of any landlocked country.
These massive boats that are more efficient at shipping, are not going to go down the Rhine. So, the cargo from them will have to be transfered to smaller ships... that's another overhead that's a disadvantage.
@@sunnyjim1355 Oh absolutely, I agree. But the Rhine river happens to be a extremely busy waterway, connecting Basel, Cologne, Dusseldorf, the Ruhr and Arnhem to the sea. In fact, interfacing between river and sea is the basis for most of the world's busiest seaports (eg Alexandria, Antwerp, Rotterdam, Hamburg, Shanghai, South Louisiana, Tokyo).
@@Pasteurpipette -Columbia River system USA case in point. Idaho french fries... to China ;
I've been a merchant mariner for 27 years. Sailed every where I wanted to go. Industry isn't dead yet. Depends on where you work and the type of vessels. Oil field is slow and towing isn't much better. Survey is still going pretty well. Pay has been drastically reduced but I'm comfortable making 80k for 6 months of work. Being a licensed Chief engineer for the last 20 years has been fun, but unless you are ready to be gone and miss just about every holiday do your research. It's not for everyone.
Wish I'd done that career. 😒
Holidays?
80k for 6 months....
6 months of holiday surely?
wait untill the United Nations agenda 20 - 30 catches up to you ...research
80K as a Chief Engineer is kind of low. At least twice as much.
Actually now glad I didn't do that career if everyone in it is that coin obsessed
And now - can’t find enough ships for the cargo - which of course does make the remaining companies more profitable
Exactly what I was thinking rewatching this
When your Living In a house of cards, you begin burning your furniture to stay warm.
That happened in the 1917 socialist Russia.
*you're
Are you saying the trading system are cards and the ships are furniture?
Is scraping those ships really a bad thing though?
@@lifeisgood5619 This is an expression an engineer I worked with used to describe deporting our industrial manufacturing base to Asia.
@@dennissalisbury496 oh okey thanks (:
I clicked on this video semi-reluctantly, as I didn’t think it sounded that interesting. But this was fantastic! Love all the connections you pointed out, how one decision on one side of the world leads to consequences on the other side. Great channel!
3:56 "twice as long, twice as thick, and twice as h-"
brain: "hard?"
video: "high"
oh
thiccc
b r u h
"Now c'mon man don't make it sound like a fat plumpy delicious c@ck"
Proof, if any was needed, that IQ is falling fast.
@@sunnyjim1355 My iq is probably higher than yours
I love how we've gotten to the point where the sensible basics of sound economic policy, such as government investment in infrastructure in times of crisis, are "big brain" moves now.
I can’t even remember the last time an American politician mentioned infrastructure.
@@jakemocci3953 Actually, I remember Trump talking about infrastructure quite often when he was running for presidency. Not that he's done a lot to actually improve it tho.
I liked the presentation, I want him to take this further and explain the risks of infrastructure, housing, tariffs, etc. however investing in infrastructure itself is a risk or else China, Japan, Europe would do it in earnest... you see China is paying premium now for something they could have done on the cheap 5-10 years ago, with a huge reduction in global demand and investment the consequences of maintenance and lack of economic growth can make this move a disaster in the next 2-10 years if they miss the mark, the same could be said of housing, tax adjustments, farm subsidies, even wars, etc. etc.
So he perhaps overly summed it up as big brain, and chuckled at Australias housing plans, (or the USAs cash in pocket plan,) but we will see.
China has a big advantage in this stuff though, which is that they have a relatively cooperative form of government that doesn't include an adversarial planning process. In the US, the regulators are always trying to kill you. They also have much more rational decison-makers than America does, and would understand subtle nuances like the advantages of freeways over high-speed rail when connecting Cleveland with Columbus (in their case, Qinzhou with Chongzuo, as those two cities in far Southeast China you've never heard of are about the same size and would have a similar economic relationship) or what a cost-benefit analysis is.
democrats have funny ideas about what the word "infrastructure" means...
It's more profitable to destroy then to maintain
yep pretty much, sad stuff none the less
@@EconomicsExplained well considering alot of older ships runs on heavy fuel oil (or diesel, depending on route), and have inefficient engines, i have to say that from the perspective of ONLY clean air, not including the pollution from ship breaking, scraping old ships are a good idea.
@@relife6764 Sad thing is though, after the pandemic passed (and we are beginning to see it at least in the developed countries), demand for crusie ships will eventually raise again, and manufacturing of new cruise ships will spike, producing a sudden surge of carbon emissions from power generations and transportation of resources.
Edit: not just cruise ships, ocean liners and such, just, all kinds of ships.
It's a bit more complicated, of course.
It's safer to scrap now then build new in case the demand comes back than take a risk maintaining currently useless ships that would keep losing value even without work.
Look at a bright side: shipyards now have a chance to get more money from shipping companies in the future - some spike in demand for their services will probably occur. Not to mention the current demand for scrappers who get a lot of work right now.
@@lcmiracle Pollution for construction is tiny compared to operation. Same wrong already debunked logic is often applied to electric cars.
Cruise ships arent really considered the merchant marine in the US
Yes, my thoughts exactly. Covid 19 has decimated the cruise ship market, but merchandise still has to get moved around the world.
Find a cruise ship ported in the USA... They're all foreign-based ships.
@@neilfrasersmith need money buy goods, stores need money to order stock... globalists are trying to break the system by attacking the logistics while crushing incomes.
NCL Pride of America in Hawaii is the only US flagged cruise.
@NotAfraidOfLeftist somehow your name really goes to show, you have some serious issues 😂😂
Yup. Chittagong, Bangladesh. You can thank us for taking up so much of our beach to recycle the whole world's ships instead of building expensive beach resorts
And look who has the jobs now and which industries have failed. Tourism has no future; recycling and sustainability, however...
And the everyone clapped
The other important part about the economy of using ships is their operation also benefits from globalization. They have flags of convenience, pay minimal taxes, have cheap labour, and can be scrapped where there are few labour or environmental regulations.
"What's going on here" 😂😂. The best of Australian accent
** WoTs gOin oN EErE
BEKFAST!
@@EconomicsExplained Will we see EE merch bearing the "Wot's goin' on 'ere" slogan?
Communism. Don't be fooled, stimulus packages are simply Communism. The Federal Reserve is rapidly seizing the means of production via monetary inflation into the share market. The next depression will be far greater than the first.
Note that Switzerland has access to maritime trade through the Rhine, with container ship routes going from Basel to Rotterdam.
Smaller ones tho
@HeedArmy83 yes but the point still stands that it has a harder time trading than countries with access to the sea
Yeah, the Mississippi river is great for shipping, but a bit of a difference in flat bottom barges and super container ships.
@@mrspeigle1 you're correct. Without navigational rivers the u s would have sunk quickly. Not having it almost lost the country politically.
Yeah that's actually true. Switzerland's handicap in manufacturing is an excessively strong currency that makes it more expensive to buy their goods outside of Switzerland than within it, and also makes everyone elses goods cheaper in Switzerland, not a lack of maritime access.
Last time I was this early, was the last video, again. Great video, gonna go sell my dad's car for scrap metal now.
haha I feelk like the patreon gang might have a bit of an unfair advantage here.
@@EconomicsExplained just maybe :) but I don't pay to be first I just _invest_
@@EconomicsExplained Definitely becoming a patreon supporter once I graduate college and get a great job. Love this content
This Chanel has the best economic discussions Iever heard in my life. All topics are developed so elocuently and taking into account the most important factors. Something that seems easy to do, but that very few acomplish. I really liked it
Me, a Mongolian subscriber: "I know man, I know.."
I feel ya man
What do you know ?
That Grand Tour special they filmed there was EPIC. Beautiful country!
@@ganbat About landlocked countries
@@matt-hew69 what grand tour special?, filmed by who?
scrapping ships (oldest) has probably also reduced a lot of expenditures on upgrading engines on them related to IMO2020 requirements on fuels/scrubbers. Where some of the oldest may have been bunkering in the newer low sulfur MFOs, they can now skip that premium and build new ships with state of the art engine systems - not having to take an active asset out of service for a year or more to refit in the process - they can sit on the cash and be planning instead...
As for someone heading into the merchant marine field, this is VERY alarming.
Get ready to get sunk and raided by the massive Chinese fleet. With few other ships around , who will notice when yours disappeared
Well the video mentioned that this is the best type of transportation.. Just sucky times..
Ships are really bad at navigating fields.
I've been a merchant mariner for 27 years. Sailed every where I wanted to go. Industry isn't dead yet. Depends on where you work and the type of vessels. Oil field is low and towing isn't much better. Survey is still going pretty well. Pay has been drastically reduced but I'm comfortable making 80k for 6 months of work. Being a licensed Chief engineer for the last 20 years has been fun, but unless you are ready to be gone and miss just about every holiday do your research. It's not for everyone.
I wouldn't worry about it...we will always need ships to move people and goods. It's just going through a transformation, which happens in every industry.
"Australia used its fiscal spending to keep on propping up a housing market that definitely wont end badly" HAHAHAHAHAAHAHAHAA
It's gonna suck while half-way through scrapping a ship, the price of steel suddenly plummets
That doesn't concern the shipowner. He gets paid once he delivers the vessel to the breaker yard. There are even specialized traders that buy ships for scrapping and pick them up anywhere in the world, pay the owner and sail it to Turkey or Bangla Desh or somewhere in Africa where labour for scrapping is cheap and safety or environmental regulations are non-existent. Now, however, the EU has put a stop to that practice and each EU shipowner must show that his (former) vessel is being scrapped in a responsible way or else he risks huge fines.
@@BaronSamedi1959 "Bye bye EU!" Shipowners selling to some non-EU holding company - that then scraps it the 'normal' way.
-and vaccines jumpstart global economies back into *buy buy buy*
It won't plummet if you control the supply
I left merchant marine as Third Assist engineer after 4 years ,used my savings(saved over 70% of income) put myself thru flight school and 5 years later got hired by major air cargo company. Retired this year, age 59 as 747 captain.
Well done pal,but what point you trying to make ?
Nice man, what was life like as a merchant marine
What was your motivation for leaving merchant marine?
@@thedarkdestroyer5063 That the average person is their own demise by not being smart economically I suppose, because few do what he did. And what he told is also just speaking of, the subject of the video
Moving with the cheese
This channel has been steadily raising the quality bar over the last year.
definitely coming close to the level of lame joke as Wendover, I like it.
Or your standards have been dropping
Except that almost everything he said in the video is either wrong of irrelevant
@@IANinALTONA what is wrong? I am curious.
@@joostsmals640 Too many things to mention, but fundamentally he does not understand how long ships last, the 7 to 12 years taken to depreciate a ship on a shipping companies books, and the relationship between ship scrapping and ship building. Ships last between 10 and 20 years depending on the type of ship and physical and economic obsolescence. They do not last 40 years. Every year something like 5% of the world's feet is scrapped and 5% is replaced. If more ships are scrapped than are built obviously the fleet will shrink. Ship owners bet on future growth of trade and on the ability of ship builders to add vessels to the fleet. What the "economist" finds so alarming is part of a recurring cycle.
I am blown away by how smart I feel after watching this. Subscribed.
Why are we up right now its like 1 am in sydney go to bed.
oh mate my bedtime is normally around 5am, but thanks for looking out for me :)
@@EconomicsExplained it's 9 am in Canada 😂. I like to think you make these videos for us Canadians 😂
@@EconomicsExplained But it is a perfect time to watch this kind of videos in western Russia - 5pm here. At least for a quarantined student like myself
@@digitalpetor Good job comrade, your English is impeccable.
its 17pm here mate
Good thing I did not listen to the guys saying that those ships would just be sold to another company
Whoever said that was right. Just the company will cut them up and melt them down instead of putting them back out to sea.
I live near that area, *Chittagong shipping graveyard* . The pollution here is off the chart. These third world countries have literally become the dumping ground ,global trash can of the first world countries luxurious lifestyles. Our area is getting the first hand experience of global warming. It's not sustainable. Sooner or later this lavish life style will backfire greatly in the near future.
Yes, and ship breaking is dirty business and is probably unregulated.
A lot of the pollution is probably the result of limited local regulation of the these areas (which unfortunately is probably why such areas are chosen l) and isn't necesarily inherent to the excessive waste of first world lifestyles.
I'm sorry to hear that, God will be taking note of 'those destroying that part of the earth' the Bible promises to 'destroy those destroying the earth' in the very near future, he will also restore earth & it's inhabitants to perfection. 🙏🌎👌
My line of thinking is dystopian, which means I should not proffer that suggestion.
@@thetruthisoutthere6870 the Bible says a lot of things.
I cannot imagine the level of damage humanity will sustain from a few hundred wealthy families who have immeasurable greed. It is truly terrifying.
U won't need to imagine it... your going to see it. And FYI it's not being done out of greed. We are being culled my friend. Lock down was designed to wipe out independent business so corporations can boom in wealth so they can then weather the storm of the great reset. Then after body count will really start to boom. All planned decades ago
@@alabar9795 sure thing mate, but you got any sources for that claim?
Most humans are greedy , if you had the money and the power you would probably do the same thing too.
Sad of all this we people let that happen under our noses that extremely greedy families destroy humanity and earth itself.
Record profits for the big corporations while millions of small businesses go bust IS evidence.
"Prop up a housing market"
Triggers in NZ
20% increase over the last year. Jacinda said they cant go up for ever and then printed up another 28 billion for more low interest loans. She may be pretty buy she is dumb AF.
Kind of like what China is doing.
i love crysis
@@tarstarkusz atleast china is building roads , you know as a capitalist i must say they made socialism work.
@@bubblegumgun3292 Building roads and bridges that aren't needed isn't capitalism (or socialism). If you are building something for the purpose of employment and stimulus, you are by definition not building something because it is needed.
I don't know why, but the phrase "so valuable that shipping costs are an irrelevant rounding error" was simply hilarious
“Australia used fiscal stimulus to keep propping up its housing market”
*laughs in Canadian*
Yea this guy thinks that making housing less affordable while robbing people of their savings is somehow "responsible" economics? He obviously doesn't understand the first thing about economics. His channel should be renamed "Lies that government wants you to believe".
2021 - add a 0 to the end of all the shipping costs. It’s not that we ran out of ships- we ran out of PORTS, rail yards, trucks…
At 9:56 . . .
China: ". . . that stimulus is coming in the form of infrastructure spending."
United States: "What's infrastructure?"
China builds poor quality infrastructure it breaks down after 2 decades. And you do realize since China is an authoritarian state it has the ability to control its market. In reality
It’s not as good as you think.
-Willing to sacrifice Freedom? "Those who sacrifice Freedom, in exchange for Security, Deserve Neither" ;
@@blogengeezer4507 In other words like talking about some people who are crazy enough to speed with the absolute delusion of conviction that they believe they have a fool proof breaking systems fitted in their vehicles for keeping them safe & secure no matter how fast or far they take their freedom! Right? .. EXCEPT NOT EVERYONE'S GROWN UP AND MATURE ENOUGH TO HANDLE SUCH A DELICATE COMPLEXITY AS ABSOLUTE FREEDOM WITHOUT SECURITY / CONTROL! You really don't want to put that kind of hope & faith in all of crazy humanity.. 🍷
@@cloutmastermemes2007 l don't have notice of any other authoritarian regime worst than United States of England . There isn't a single Latin American country that hasn't suffered with dictatorships implemented by the CIA . The same in Africa , Asia and Middle East .
If it's not authoritarianism , my grandpa is a bycicle .
Salute from Brazil .
California is leading the infrastructure way with its high speed rail to nowhere and converting EVERYTHING to non-fossil fuel energy sources. They can always supplement their energy needs with wood from the forests which are burning anyway with great regularity. However they probably would not be smart enough to harvest the wood that grows close to where people live and work. Will Rogers said, "When the Okies left Oklahoma and moved to California, it raised the I.Q. of both states." (I absolutely love that quote.)
A big cost for merchant fleets is they must go green and cut emissions down starting 2021 in addition to become for efficient and cut other costs.This was pre-covid. Only the big guys can survive.
And that's the whole point... Centralization.
-One World Governance, 'Brave New World', or... "Some Pigs are More Equal than Others" ;
you got the point.
regarding the emission rules will be valid in 2021, the old-tech vessels will be prohibited while new vessels with less CO2 emission have been built for replacing those old ones therefore there have been excess container vessels in the market causing fleet price to decrease.
with more cost - less profit , i still be in doubt how they withstand.
I for one see most of this Global Warming as a pack of pure 💩. I grew up with the cries of the same sorts whining about the Millennial Ice Age coming our way. Then low and behold decades later (August 2020) the scientist leading the charge publishes his apologetic reaction saying he was 😑 wrong. Awww Gee. Probably seeking some last glimmer of notoriety.
Anyways one of the few things I agree with in all this is the amount pollution you find in bunker oil. It’s really nasty,on a grand scale. I think I read someplace it was on the order of 2500 x as dirty as gasoline. Here in the North Country many institutions military bases and such all ran on that stuff via a big steam central heat plant. Most if not all have been modernized to diesel / HHO or done away with in favor of natural gas.
I saw a couple documentaries showing quasi modernized ships running bunker and diesel the diesel being required for near shore operations. I can see where that ramps up the costs and they made a big show of that in the documentary. Sign of the times I guess. It’s probably just good financial sense to start over with new compliant gear. The world moves on.....
@@drizler also I think diesel is better for the engine then bunker oil. It sounds to be that bunker oil really clog up the engine components faster then diesel does and soon we will go over to biodiesel that is even better then regular diesel
Nicely done. This is excellent explanaition. Explainning the logistics of the profit motive is terrific.
Glad you enjoyed it!
Or minimizing losses motive.
Before finding out, I say besides taking out a few key parts is that when you have layers of steel welded together, it becomes way too costly to tear it apart as opposed to mining iron ore and making new steel.
Not with paid like a slave labour!
Sustainable ship recycling is a must nowadays. Shipbreakers in developing countries should be able to implement ship recycling plans without incurring significant costs. A good idea might be that the entire shipbreaking process is carried out on a specially constructed bed rather than a muddy surface. By the way, great video Economics Explained! Very interesting, looking forward to the next one.
I like how he measured the width of the ship as "2X Thiccc
0:00 - "This is the Carnival Imagination" while the stern reads Carnival Fantasy :D
I thought the same thing, but wasn't too sure if he was referring to the boat he was on. After doing a short research this is what I found out "Carnival Cruise Lines announced July 23 that the 1995-built Carnival Imagination would be placed in long-term layup, with no immediate plans for it to re-enter the fleet. On August 26, the ship officially embarked on its last journey, sailing from Willemstad, Curacao, to Aliaga, Turkey, where it will be broken up." According to Marine traffic Aliaga Turkey was the last port he was reported to be at. Too sad, it was actually the first cruise I got on.
I think he means the ship that the camera recording the fanatasy is on.
i would have thought the first one they scrapped was the diamond princess. Last time i was on it, it was looking pretty rough around the edges
@@gregh7457 That's not a Carnival ship. "They" (meaning Carnival's executives) can't scrap a competitor's ship (unless they buy it).
@@mal2ksc which one isn't carnival? princess is owned by carnival btw
"Earlier this year oil price went into negatives"
That hurts my soul. We have gas prices way over 8$ per gallon.
What hurts my soul is that it is 100% unecessary for us to still be an oil based economy :o( Greed, selfishness, & ignorance will be the end of us :o(
Your ignorance is simply staggering.
@@JustMe-nf1mf your ignorance is absolute
should be $200 per gallon. limited resources should be the most expensive things and continue to get more expensive.
but it's the same all around the world, comfort creatures not willing to accept responsibility are ruining the world for generations to come.
Keep up the great work EE. I love this channel so much, I learn something new every day
Thanks mate, that is so nice to hear :)
7:11 isn't that the port that blew up from the fertilizer explosion?
it's actually cassablanca in morroco, but you are right it looks unbeleivably similar.
@@EconomicsExplained wow that resemblance is uncanny.
Same thought
@@EconomicsExplained Generica strikes again!
There are a few ports in this video.
when you learn more from a youtube channel than school
Or the papers.............
Bro you will learn so much more about economics if you actually pay attention to a collegiate level economics class than watch his videos. Believe me, I LOVE this channel, but he definitely dumbs down certain things for his viewers. Not saying it is a bad thing, but school, books, and research papers are what provide you with the same knowledge he has for economics not TH-cam videos.
@@davidmccullough3278 LOL. There have been many studies about what the average student remembers from their Economics Courses. It ain't much. Many (maybe it was the majority, I forget) actually answered basic questions worse after studying Economics than before they took the class.
Using this site will give you definite fail in Economics.
10:51 lolol " commodity prices go brrrr". Wall Street Bets hits the EE channel. Lol love it.
Wow, not only commercial vessels but even military battleships were limited by the Panama canal.
This leads to question, where and how can you scrap some large inventions like battleships and space rockets?
Space rockets? Traditonally you'd scrap them to a bottom of an ocean.. Besides, relative to their cost, the amount of materials put in to them, is once again a rounding error.
the large ones would probably just go around the continents the old fashioned way
Spaceships are scrapped in a high orbit or in the pole of inaccesibility in the South Pacific Ocean.
The Japanese and the Germans built some battleships that were too wide to pass through the Panama Canal locks of the 1940s. The largest, last US Navy and Royal Navy battleships (the four Iowas and HMS Vanguard) can/could slide into those locks with a few molecules of air to spare.
A lot of warships these days aren’t sent to scrapyards but are sunk during live-fire exercises and turned into artificial reefs.
Watching this a few days after the Suez Canal cargo problem is a trip :p
Watching this as failing global supply chains are causing inflation to skyrocket even moreso…
Brilliantly presented. This reminds me of the series “Connections” by James Burke.
Wow! I recently 'connected' with this series a couple of months ago. It seems incredibly prescient. For your delectation.....episode 1 ;) th-cam.com/video/XetplHcM7aQ/w-d-xo.html
This entire video is cringe. Almost zero economic knowledge to be had here.
Hey I’m not sure if it was affected by the time of making this video but I saw you mentioned a cargo ship container would cost around €2200 to ship from UK to Australia. My dad works for a company that does business with China and he told me that they increased the shipping rate of the containers from around three to $4000 a container all the way up to $12-$13,000 per container today. The cost of shipping is actually rapidly increasing because of Covid and the reduced merchant fleets to deliver the product.
Before watching the video, I would assume that with these ships being unable to sail, they still have to be put in port somewhere and there just isn't enough space for them all considering ports weren't built to hold all of them as they were intended to only spend a bit of time there then depart. Also, it would cost money constantly for them to just stick around in port and I would assume with the sudden demand for port access with so many ships needing it, the prices have probably gone up. So ultimately, it would've cost more money in the long term to keep the ships than not to, especially considering that cruises got IMMENSE bad press over how fast diseases spread through them and they've had a lot of news coverage before that for other issues. They probably thought it would take too long for the cruise industry to recover and it just wouldn't be worth it for a long time and is better to just scrap them to get that stimulus of money to do something else with. So now i'll watch the video and see if any of that syncs up. :P
1:03 'I don't burn down my house if a video gets less than 10k likes'
04:20 ' Out of fear of sounding like a Wendover Productions video'
I'm not even half way through and your jokes are killing me :'D. GG
If you want to buy the Eiffel Tower, please give me a call.
are you also the agent for the Golden Gate and Bay bridges ? asking for a friend...
I wonder what would be the minimum number of rivets / bolts that you would need to remove before the entire thing came tumbling down...
@@lylestavast7652 they serve a function for people to get back and forth to work. The Effel Tower serves zero function.
@Humble Bumble Homestead how
Like exactly which bolts and how and why
Can we haggle ?
September 2021 shipping costs per container have skyrocketed. $ 20, 000 U.S. dollars or £17,000 British pounds.
Lost my Job: I think I'm the enter the Maritime Industry.
Economics Explained: You're funny.
There are still lots of jobs. World trade increased year on year, the cruise industry has took a hit but that’s about it. I’ve just qualified as 3rd engineer and found a job relatively easily
@@scottwhitley3392 Great job man. I was the get my MMC, but I got caught up working another job for now. See you on the seas- eventually.
No kidding!
@@wolfenstien13 a lot of jobs will say “2 years experience required”, but apply for them anyway.
They don't own the ships, their debtors do. So why sail around a liability that isn't making money when you can liquidate it and pay back some of the debt?
its common practice in economic downturns to get rid of older less efficient assets. The airlines are doing on a much bigger scale right now
I've got an old chain link fence and banding wire .. if I band it up to look like a ship ..... maybe I can get that Ferrari after all!! yet another good video.
I think i found my favorite channel.. economics 👍👍👍!!!
The good fallout from all of this is that Somali pirates are starving.
They aren't :(
In fact the number of hijacks raised by 40% compared to last year(IMB Piracy Reporting Centre).
The reason is that ships that are still sailing have fewer crew members due to coronavirus pandemic and since there is less demand for ships, the money is running low for the companies, so they cut costs with armed security.
Soon we will be to
Just when you thought 2020 couldn't get worse - Corona pirates!
@Europa Europa:
Pirates are operating very much in the Bight of Benin (West African coast)
19 seafarers were kidnapped on one day only last week.
Doesn't make the news though...... Wonder why?
@LordMacKarl It's as bad, if not worse, at the moment in the bight of Benin, West Africa.
The lack of international positive action is a disgrace.
Hopefully a lot of the ships being scrapped are the rusty old single hull ships registered in dodgy ports that cause so much damage.
Yep hopefully we will have a newer better Fleet as a result
Old crappy ships are likely the most economic to scrap
All I got from this is that global trade suffers while China flourishes.
Sun always rises in Beijing, I guess.
I'm pretty sure China has been hit hard by the pandemic as well. Also it helps that they eventually took Covid with the utmost of seriousness.
China is also suffering financial crises, the difference is these don't get exposed because of the tight propaganda the CCP runs. We don't really know the financial state of that country tbh.
@@COUNTVLAIDMIR I think we know quite well the financial potential China has. Unlike our democratic(ish) societies, China has no such constraints and it has an absolutely *massive* workforce, supply chain, infrastructure, military, huge amounts of natural resources, and a perfect location (other than perhaps North America or Africa). Chinese civilians are not going to see the benefits of this, but since the government has basically no obligation to them, China as a country will prosper.
What needs to happen is a cultural revolution in China, that will benefit western nations and chinese citizens alike.
I foresee that happening, and we'll then see something similar happen in Africa.
@@hunterm9 Any things possible BUT Chinas is a step ahead of most nations , They have always been traders not warmonger's & good at it , They will screw you down & spit you out if your not in there field .
@@hunterm9 Chinese citizens benefited from the growth china made, suggesting otherwise is wrong
Very nicely explained,loved it
Thanks
I am from Chittagong. Ship breaking is a huge business in Bangladesh.
“Low cost manufacturing in China”
That’s one way to put it
Slave labor in China.
Fixed it for you.
@@andrewthompson5728 nah fam. slave labor only in America, England and Africa, not China. do your own research and not let CNN brainwash u.
@@Ray-no9sj It is so pleasing to review a mandatory response from a faithful Party Member! Drink your koolaid.
@@andrewthompson5728 ah yes the conspiracy theory brainwashed into you that no Chinese support cpc and that all supporters are 50cent and wumaos😁 since you say I am forced to comment, I guess I'll call you the CIA agent train by Mike Pompeo to lie, cheat, and steal.
@@Ray-no9sj says the suicide nets around the apple factory lol, I can quit my job here in america
I almost choked on my lunch when you called out wendover productions.
Very interesting
Wondering if this scrapping has anything to do with the impact IMOs sulphur regulations will have on the costs of operating the older ships..
Hey that's an interesting point.
That definitely comes into play. Much like Euro 5 exhaust regulations, it makes old tech prohibitively expensive.
when you traffic bulk cocaine, you can trash ships just like jets
James I don't think that with cruise companies trashing their ships right now, that bulk cocaine trafficking was possible at least not since the 1980's. With Carnival at least the restrictions of not allowing the boarding of provisions in foreign ports intentionally makes such a thing near impossible. If you believe that companies can scrap their ships after making big profits in drugs then only cargo ships could do that successfully and this phenomenon is much more than just cargo ships being scrapped. Furthermore "bulk cocaine" requires ship ports in countries with bulk available which is only a few tourist destinations. For the years on board that I had full access to 100% of every space on my ship due to my job position, I would bet everything that company involvement did not happen even once. This scrapping issue is much bigger and much more serious an issue for the world economy. This destruction of ships means something else.
@@matthewkelleyhotmail I don't think he means cruise ships in particular though. The Coast Guard inspections made it highly unlikely any long-term smuggling operations could be sustained, although it was certainly possible to buy drugs in port in _personal_ quantities, and then conceal them.
Acchualleey, cocaine is shipped by the US Treasury, they embue it within the dollar and use Nimitz class aircraft carriers to surreptitiously transport it to Iraq, where military contractors get first dibs
@The mans neighbor dammit, I was making a joke, is it because the FBI had to watch Up In Smoke?
@The mans neighbor Yup. Plus the Royals were doing smack via the Royal Navy I heard.
Sooo ship owners collectively reduce their fleet sizes and overhead to reduce supply so once global economy/demand rebounds they can exponentially increase their rates/profits. We the people will pay... GROSS!
Thanks for the video.
3:58 "2X Thicc"
cccccCC
This is actually great news. I've said for the last few years that there are simply too many ships and too much tonnage by companies to service the industry. Rates have been so low several companies have gone under, before covid. Other shipping companies would keep increasing their fleets and the problem continued, too much capacity and not enough tonnage to be shipped worldwide even with rediculously low shipping rates of the last few years. Taking older ships out of the business will ease the problem for a bit, but only if they aren't replaced immediately will it solve the problem for the long run.
Well, this aged like lettuce…
For your example, correct me if I'm wrong but doesn't Switzerland have a massive merchant fleet, plus a large port on the Rhine?
Connor Ozkrffe 'they are river barges rather than ocean going ships .But half the world's ships are propelled by Swiss engines -Sulzer designed diesels go up to 2700 ton 14 cylinder two stroke cross head design worth power outputs up to over 100000 kilowatts .These propel these huge ships at up to cruising speeds of up to 27 knots .They are huge with the crankshaft up to.over 30 metres long and each cylinder is about 20000 c.c capacity.
@@ronnieince4568 - Thank you! Monitoring their stocks now
One of the largest ocean shipping companies, MSC, is Swiss owned.
There is a big difference between companies registered in a country having financial control of an asset (a merchant fleet in this case), and that same country being able to use the asset itself.
The swiss have went the way of supplying high-value/low-quantity products and services (engines, navigation equipment, financing, insurance, etc.) to service this profitable asset, so other companies and countries have to essentially pay them rent to use the asset (to ship stuff in this case). That "rent" can then be reinvested into these industries producing/offering the products and services at even higher efficiencies, perpetuating the cycle.
This is basically the strategy for "going tall" with a few valuable industries, instead of "going wide" with a lot of high-volume industries (like China, India and many other neighbours there).
@@SolyomSzava yes the largest ship ownining nation by port of registry is Liberia -must be half the worlds large merchant ships registered in Monrovia .
very interesting. Thanks
Well, not "always."
In the USA it's destroyed our middle class and destroyed our country
your country was destroyed by the likes of Ted Cruz who thinks that they are above everyone's suffering
@@fecmultimedia1488 Tell that to Nancy Pelosi, the decades long incumbent slum lord of LA.
@@JRyan-lu5im oh and Trump supporters also had a hand in it?? I guess by the sound of you you are one too???😉😹😹😹😹
Our country is beening destroyed by power hungry politicians. We need infrastructure, and they won't do anything.
@@fecmultimedia1488 LOL. Man takes a vacation, literally Hitler in the mind of nutjobs.
Very entertaining and informative. This isn't something I would normally watch, but you managed to make a boring subject like economics fun and interesting to watch. I actually enjoyed watching.
That explains why i have only seen 1 ship going through soez channel in the last 3 months (i am currently living in Sinai, Egypt)
This is yet another indicator of the bumpy ride ahead. Massive cuts in the ability to ship massive quantities of whatever will affect us all. In some way shape or fashion here in America the avg item on the grocery shelf travels
1500 miles.
Oh yeah, you live in Egypt and call it the SOEZ canal? Not SUEZ? Is there a language barrier?
Liked and subscribed. Good job!
C.o.n.t.a.c.t. M.e. O.n
W.h.a.t.s.a.p *+1..2..1..3..2..9...7..4...3...9...0*
Sorry for late response I was very busy
Do well to respond 🙏
Talked to an import/export expert, the shipping companies actually just recently doubled/tripled their rates, as long as it's cheaper than air freight, they can do what they please.
Yup! Perfect excuse to cut capacity and then raise prices. Its not like you have other options! Most of the 2000s was spent building tons of shipping capacity, and drilling for oil as well. Oversupply caused prices to go down for both. I work in maritime shipping and see the container rates creeping upwards.
Why weren't they higher in the first place? Did the price of air freight rise for some reason?
You can ship to Switzerland (Basel Port) over the Rhine river, which is directly linked to the sea and seaports like Rotterdam.
yeah but the rhine, from I've seen when I was over there, is pretty narrow and shallow at a lot of points, at least in the area i saw at the swiss-austrian border. doesn't seem suited for mass freight
@@Currrby The Swiss-Austrian border is way upstream from Basel
@@Currrby From what I could find you will be looking at ships that are 12m wide.Much less than ocean going ships.
The Rhine does exactly the same for Europe as the Mississippi and Ohio rivers does for the US, exporting/importing to the central regions of each continent.
It hurt my brain when you said “go brrr” in the middle of this otherwise super professional and insightful mini-doc. It was like when your grandpa says “that was rad” to try to sound hip.
Interesting - thanks.