I suppose if I had to argue, that I would argue that a hub and spoke inter-continental intermodal shipping model combines large vessels with smaller feeder vessels and trans-shipping.

When I used to work in the grain business we used all forms of transport. There was no either or. We used trucks, railcars, barges, lakers and large ships. Lakers (10k-40k tonnes) used to take smaller loads down the Great Lakes where they were then cross-loaded onto larger vessels bound for Europe (or ME). It was not cost efficient to send a smaller vessel in place of a large ship.

Again in ARA the larger ships were then cross-loaded onto barges, rail or truck for their onward journey to end user. But we also shipped specialty grains like feed peas in containers as the cargo sizes were much smaller. Many of these boats are self-loaders/unloaders so they require less port infrastructure.

We could run large trains with 100, 200 or more railcars filled with grain from Canada to the Gulf in direct competition from barge freight on the Mississippi. However, to be fair that was comparing on price alone. If there were any hidden subsidies I do not know? The rail companies may have offered such low rates on a loss leader basis to increase volume and reduce their fixed costs per tonne of freight? Or they wanted to use excess capacity? Regardless, as a grain trader for import and export you are watching all freight markets, and you move the cargo in the most efficient and/or economical manner to minimize your costs and maximize your profits.

My friend that studied shipping and works here for the largest shipping company on the island tells me that there is no way that rail can compete with water when all subsidies are taken into account. Just like trucking cannot compete fairly with railroads over distance either. But then bunker fuel is normally sold without any taxes on it, and ports are often subsidized as well, so to get the real, true picture we have to back those subsidies out so we are comparing likes to one another.

But in a post peak oil world energy will be more expensive in absolute terms as petroleum is replaced with less efficient alteratives that will increase the cost to generate and supply energy, but also we may have less net available energy, so both factors will affect the size of the economy, the economics of long-distance transport and the level of trade between nations.

Since this in no way conflicts with the concept that smaller ships, possibly Sail-Powered, eventually replace larger ships powered by Bunker Fuel, I think we have reached a reasonable compromise for the moment

As we spin down, no doubt intermodal shipping will morph into some form suitable to whatever economic activity is going on. It appears to me anyhow that at least for some period virtually no consumer based shipping will go on due to demand destruction as well as protectionism in the commodities trade. At a certain point when food becomes scarce enough/expensive enough on the shelves of the American Grocery store, it won't get shipped offshore. Clearly the traffic in transport of new Automobiles will decrease, since fewer will be produced. Once the volume decreases enough, the shipping companies themselves will of course have to downsize, dry docking many of the larger vessels, putting their balance sheets in the red. Still have to service the debt on most of those vessels, just they aren't producing income anymore.

The dislocation period is the most unpredictable element here. Its the "divide by zero" point on the curve, its not mathematically definable. IMHO, this period lasts 20-30 years, and is characterized by some international wars and some balkanization of modern states, and a breakdown of the global financial system temporarily replaced by local barter economies. Its only after this period with some overall population reduction of indeterminate measure that some form of international trade could restart itself. How big that would be and in what form it occurs and what type of ships will be doing the intercontinental transport are anyone's guess. If enough heavy crude burnable in Bunker Fuel ships is left available at that time and its economically competitive against sail rigged ships, that is the way it will go. If too much of even the junk fuel is burned up at that time, some form of sail rigged ships reappear.

We are just now riding the train INTO the Tunnel. The Light at the End of the Tunnel is not visible at all. Hopefully, when we see that light, it won't be the light of an Oncoming Train. LOL.

Reverse Engineer

Apparently you can run Lakers in fresh water for 70-100 plus years, so you can convert existing ships for other purposes. However, saltwater is much more corrosive, so after twenty or thirty years the ship is a write-off. It either needs to be melted down or abandoned depending on the cost of new steel versus the cost of recycling. If left to rot then rust will make the steel all but unusable.

Therefore, any prolongued disruption in intercontinental shipping would by necessity followed by the need to start from scratch as far as shipping fleets go. However, even in times of turbulence there will be an ad hoc need for ships and transport, so those still left in commission will be able to charge a hefty premium, whether that premium is paid in money or goods in kind.

Hang on Mr. Bill, naval vessels given proper maintainence routinely stay in service for 40++ years, some of them for 50+. Merchant ships on the ocean kept growing because the size of the crew does not go up proportionately to the size of the ship, merchants on the high seas would have a higher profit margin for a ship that was as big as technology allowed because the savings in crew pay are substantial over the life of the ship. Older merchant ships might only have three less crew members but carry half the cargo, clearly there was an economic insentive to build them as big as you could for the specific route they are designed for.

It wasn't corrosion that killed the smaller ocean freighters, it was pure simple economics in a cheap energy world.

Also it does not matter how corroded a piece of steel gets, when you run it through a furnace with flux/slag the corrosion is carried away and you are left with pure iron and whatever alloy metals were in the mix minus whatever stuck to the slag, which usually isn't very much. If you have a 10,000 ton wreck for free I will gladly accept it and scrap it out, that would make me a tidy profit.

Hi Tanada! Yes I stand corrected. Of course, that assumes the vessel is well-maintained. Canada still uses some of its WWII-era naval vessels. Mind you they spend a lot of time being maintained and there is no commercial reason to maintain them. If there is no economic need for a vessel, however, then there is no income coming in to pay for that needed maintenance. We were talking about a cessation of economic activity for one reason or another.

Secondly, corroded steel can be reworked, but not steel that has rusted through due to the salt air. So if a ship is taken out of service its salvage needs to take place before it rusts away. The sooner the better. But that also means dealing with contaminants (hopefully), so again whether a ship gets recycled depends on the demand for steel, and the cost in terms of energy and manpower to recycle it compared with new steel. All factors to consider.

If we consider all but the hardest of declines, like a massive die-off situation, bunker fuels made out of renewable sources (yes, I am talking plant derived fuels, like soy oil and stuff - please don't shoot me) will likely be available. That would be a source of trash recycling, wouldn't it?

My guess is that most reduction will come from demand destruction in western countries, because of increased costs of food, energy and basic needs. I'll even go as far as saying most shipping towards western countries will be of raw materials needed (food, water, stuff people need to live on) or the odd consumer product. In essence, due to rising prices, only cargoes with a high value will make sense.

This hits home with my concept of simpler, more local living. What do you guys think? The very first conclusion is that unnecessary consumer goods ("grown up toys") will be available, but rarer and MUCH MORE EXPENSIVE. That follows the past availability of consumer goods before globalization, here in Portugal: you wanted a nice VCR in 1980? Sure, there were shops that had them for sale - if only people could afford them. People couldn't, of course. The fight back then was to change the 1960 black and white TV. The second conclusion is that Asian countries, whose economies are highly dependent of a positive trade balance, might just get the sharp end of this.

Speaking within the next 50 years this is what my crystal ball tells me.

1) Ships will get smaller and the reason is because of the trucking industry.
huh what?
When a ship docks in port it's containers get unloaded and sent onto say 5,000 trucks driving off into 5,000 different directions.
If half the truck drivers go out of business in the future (very plausible) then a 5,000 container ship won't make much sense. New ships will have to be built smaller.
BTW as of this writing the largest ship in the world can hold 7,600 containers.

2) Correct me if I'm wrong here:
Ships are amazingly fuel efficient so therefore the cost of fuel relative to (total capital+operations cost) is less for a ship then a truck. If there is some "alternative" fuel that gets developed it will most likely go into trucks first because they seem to need it more than anyone else.
//
From what I've been reading there are actually *serious* plans to build even bigger ships so technically the world has not reached "peak shipping" yet.
IMHO if / when a Malacca-max container ship actually gets built, it will become the shipping equivalent of the airbus A380.

Yes, I agree. I read before that fuel costs were in the vicinity of 5% costs of shipping, so there's no rush in pouring soy milk into the fuel tanks of ships. I was pointing at a situation where there are potential shortages - shipping will not stop because of the "end", or unavailability, of oil. Although the all-renewable ship you (?) posted above was really interesting, maybe a substitute bunker fuel, from renewable sources, could be developed and available within interesting prices, which would help offset the cost increase of transported goods, even if that's just in a few percent.

My point is that reduced shipping will probably not come from the costs of shipping itself, which have been shown to be quite low, but from economic downturn.

Shipping may be a very efficient activity, and could maintain most of that efficiency, but the Last Mile, the increasing cost of extraction of raw materials - all those activities will be losing efficiency, causing a price increase and therefore reducing demand, in positive feedback.

Here's a link that discuses the growth of the standard container for intermodal freight and the huge changes and cost reductions it brought to shipping due to automation.

http://press.princeton.edu/chapters/s8131.html



It may be that intermodal freight will continue albeit at lower levels given that much of the port infrastructure is electrical. In the long term who knows...

This lower cost could explain the reason for grain shipping by rail since grain is loaded into rail cars not containers and requires special machinery and time. Perhaps MrBill it explains the cost difference you observed in grain shipping from Manitoba to Texas.



Also found a link that discusses some of the externalities of ocean freight on the Great Lakes.
http://www.invadingspecies.com/News.cfm?A=Get&ID=52

A great example of a hidden cost of shipping borne by the local recipient versus charged to the shipment.

Thanks for those links, Canuk. I remember reading about how the container revolutionised shipping, but it is nice to find a source for the information again. Cheers.

RE: grain from Manitoba to Texas. Not really a natural flow.

One, exports of wheat, oats and barley from Alberta, Saskatchewan and Manitoba are handled (at the moment) exclusively by the Canadian Wheat Board (CWB). So most Prairie grain gets shipped west-east for export out of Vancouver, Prince Rupert, Thunderbay or Churchill and not north-south of the 49th.

Secondly, yields on the Prairies for wheat, oats and barley as well as canola (rapeseed) do not approach yields of corn and soybeans in the Midwest. One we have a shorter growing season. Not enough heat units for feed corn. And secondly, we have less irrigation, so our yields per acre are generally lower. Comparing dryland farming in Manitoba for wheat to irrigated corn production in Iowa dramatically so.

Thirdly, as the Midwest is located near the Ohio and Mississippi Rivers the natural way to move corn or soybeans to Texas would be via barge, although I suppose that would compete with train as well? But I doubt rail from Canada can compete with rail from the Midwest.

Most corn and soybeans grown in Canada are in Ontario that is further south, gets more heat units per year and has a more favorable climate. There is two way border trading with corn and soybeans moving both north and south depending on the year, supply and demand, cost of local transport and price. Most of the corn and soybeans that moves from Ontario to Quebec is by truck, but rail is an alternative. To the Maritimes by rail mainly. Fishmeal from the east coast is one backhaul for the animal feed industry.

North-south exports to the Gulf of Mexico would be either hard red spring wheat for bread making or soft spring wheat for making pastas. But again from western Canada only by the CWB monopoly. Whereas from Ontario it might be the private grain companies. Some specialty grains like heavy feed oats get cleaned and polished in Ontario and then exported to places like Kentucky for the racehorse industry.

That is perhaps a little too much detail, but just to illustrate that the logistics are quite complicated, but that there is an almost seamless interconnection between truck, rail, barge, laker and ship when moving grain. It is not an either or decision, but one based on price. In the future it might be based on price and availability of fuel. The last numbers I saw - and they may be out of date by now - is that for 50-cents per bushel you can ship grain across the continent and for another 50-cents send it to another continent. If I have the chance I would be interested to know if those numbers are still close to reality?



This graph just shows that wheat prices have sunk 16% year to date so far. Despite higher fuel and fertilizer prices, and the increased use of corn for bio-fuel. Wheat generally trades at a premium to corn as corn is primarily an animal feed whereas wheat is mostly used to make bread or pasta for human consumption. That relationship does not always hold, but overtime it has shown to be quite stable.

I think it just goes to prove that when we speak of the consequences of higher fuel prices on food and fertilizer that it is much more complicated then we might assume. Add in freight differentials and the picture gets much more complex. Projecting these relationships - import, export, domestic consumption, grain versus meat production, etc - into the future is not so black and white.

Can the usage of corn for bio-fuel raise the price of wheat? Is wheat being used as a substitute for corn as animal feed?

The least-cost formulation of animal feed can substitute almost any grain for any other grain as well as add protein supplements like soybean, canola and fishmeal. However, they are imperfect substitutes for one another. Wheat has a different protein content than either corn or soybean/canola meal. Changes in formulation have to be done over time to avoid digestion problems. There is a limit to how much wheat you can feed poultry due to the amount of wheat gluten. You can feed beef cattle on alfalfa, but if you turn a cow out in a lush alfalfa field they will eat too much, become bloated and suddenly die. Etc. Also they are often grown on the same land, so land dedicated to corn can affect the price of wheat through supply. So corn and wheat are substitutes, but only within limits.
[align=center][/align][align=center]A tractor farm.[/align]
[align=center]Growing GM tractors that can run on bio-diesel[/align]

I think in any scenario, containerized shipping remains the best model. I'm going to paint a picture of how containerized shipping works in a world completely devoid of Oil, and to keep Mr Bill happy, I'm going to use both Bunker Fueled ships for intercontinental transport as well as the hub-spoke system for those Ports I could make it work with Sail, but its not essential.

First off, I am going to hypothesize a 50% global die off so we are less stressed on the population level. 50% die off, 50% reduction in the total volume of goods, ships 1/2 the size necessary for the same relative transport of goods.

On the Intercontinental level, these ships are about half the size of current container ships, for a while can burn what heavy crude is available, eventually they just burn switchgrass or whatever. The containers they carry though are not the size of current containers, they are maybe 1/4 the size. Small enough that they can be on and offloaded utilizing human and animal powered winching systems if necessary, but around the Hub ports there is electricity generated by Windmills, Tidal Generators and Solar Collection.

At said Hub Ports, these smaller containers are put on still smaller SAIL vessels and barges which ply the coasts and inland waterways. Don't need as many Longshoremen as in the old days of bulk transport in the hold of a ship, but more than in the days when you could depend on oil to power huge cranes and so forth to haul up the containers.

To this point in the equation of downsizing, you haven't lost most of the technology from the old days, its just all scaled down to represent the population at large scaling down. Very little oil needed in this if any, and of course those Bunker Fuel ships could at least be assisted by a Parachute Sail when heading downwind, which they will for sure in at least one direction. Make them nice and long and skinny and optimize the drag coefficient as well.

These smaller sailboats and barges hit the more local hubs, where there aren't the Windmills and the Hydropower to drive the small cranes needed to offload the small containers, but long as there are enough guys working the shore, they can winch them up and winch them down with their own muscle and some mechanical advantage. Employ a few horses to do some of the major pulling also, I would bet if you were real efficient about it you could do the same job of offloading a container as is done now utilizing oil. The SLOW part of this step has nothing to do with the power involved, its the ACCURACY. I drove a Big Rig for 6 years, I hit the railyards MANY times to pick up containers, and droping these things on the trailer frame takes accuracy mainly. The speed has nothing to do with the power of the engines driving it, its all about not running the engines too fast or trying to swing into position too fast. Then you go outta control, which I saw happen on a couple of occassions also. In any event, you work with smaller containers, you actually can work a bit faster because you don't have so many problems with the inertia. Yes you will need more people here involved, but this is good from the employment perspective.

So anyhow, once dropped onshore at the Local Ports, how do these smaller containers make their way the Last Mile to the Consumer?

Well, first off you still have the Railroads, which like the ships can be Bunker Fuel powered. Or the rail lines might be electrified with Wind/Hydro Power, or a combination of both. Or you simply could have teams of Horses pulling the rail cars along the tracks. Slower than a modern railroad? Somewhat yes, but really have you ever sat at a crossing and watched how slow a freight train generally moves? Not more than about 15 mph most of the time except on long stretches of flat ground uninterupted by crossings. You simply cannot speed such things up and slow them down all that fast. Inertia. So again, while this slows down the whole process some, it does not slow it down SOOOO much it doesn't work. Know that because that is how it was DONE in the past, as long as the goods you are moving don't go bad, it does not matter if it takes a week or 3 months to move it around. Will you be able to get Maine Lobster in San Diego and eat it? No way. However, you certainly can get grain from the Midwest to New York this way and it still still be in fine shape.

Once you get the stuff to a central destination point, the individual consumer can go pick up the stuff himself with his horse and wagon, like we go to Walmart or the Big Box stores today in our Auomobiles. Do you go as often or buy the same Chinese CRAP? NO of course not, you mainly take a trip once a week or once a month to buy grain at the distribution center, to buy it you trade the nice Knives you make in your Forge at home since you are a Blacksmith, and the nice Sweaters your wife Knits at home from the Yarn you picked up on your last trip to the market. She ADDED VALUE to the yarn making a sweater, as you ADDED VALUE to the metal you got from the JUNKED CARS in your neighborhood by turning them into USEFUL KNIVES.

Where in ANY of this was OIL necessary? It was not necessary ANYWHERE, and commerce continues on the international level, albeit somewhat slower and somewhat reduced in the speed of transport and production. To say that Oil is necessary to retain international commerce long term is a CANARD. Reduced in volume for sure, but gone entirely? Not necessarily.

The problem here is in the transition downward, the dislocation, the Divide by Zero point in the current economy. The collapse of the current economic system means that for a period of time, we are in the Darkness of the Tunnel, but it does not have to mean that forever and all time society is DOOMED. We can emerge from the other side of this, smaller and in many senses BETTER, because we will be in better balance with what the Planet Earth can provide us in a sustainable fashion. We don't NEED Oil, we don't even need High Tech solutions like Solar Cells derived from Oil or Nuclear Power we can't run without oil to mine for the Uranium and refine it. All we REALLY need is what the Earth gives us, the Wind, the Animals for labor, a little basic engine technology and our own intelligence to properly organize the SYSTEM. Its all about systems, not energy really. Work it efficiently, my bet is you could achieve a carrying capacity of 2 Billion or perhaps even 3 Billion this way.

Reverse Engineer

I still think a large container ship would be more efficient, whatever the size of the population (number of clients). The efficiency of the vessel itself, measured in the energy used per kilogram of cargo carried, increases with the size of the vessel. A larger, heavier, more capacious ship will give a better ROI, whatever the size of the population it's serving. I suppose the ships used to haul cargo into Portugal are the same size as the ships used to haul cargo into the US.

What generally happens with larger vessels is that they are run up a beach in Bangladesh and then dismantled /cut up by hand. A swarm of guys using nothing much more than cutting torches and muscle power. About as lo-tech as it gets. The scrap steel is very much worth recycling at current prices. Bronze, brass and copper fittings, especially the propellers, are the cream on the cake.

http://news.bbc.co.uk/1/hi/world/south_asia/2561965.stm