Shipping containers are seen at a port of Kwai Tsing Container Terminals in Hong Kong, Friday, Nov. 5, 2021.
LEFT: Staxxon Folding Containers hopes its collapsable seaport containers help improve efficiencies and reduce costs and emissions for global supply chains.
A New Jersey-based company with operations in Delaware hopes to bring more efficiencies to the global shipping sector.
Workers in protective suits carry foldable chairs as they head to a locked-down residential complex on Sunday, May 8, 2022, in Beijing. China is staying with a "zero-COVID" strategy of lockdowns and other restrictions despite the economic costs and the fact that many other countries around the world are loosening up and trying to live with the virus. (AP Photo/Andy Wong)
In this photo taken May 2022 released on Friday, May 27, 2022 by the Taiwan Ministry of National Defense, a Taiwan self-made anti-ship Brave Wind II or Hsiung Feng II missile is launched from a war ship in Taiwan's eastern waters off Pingtung County in Southern Taiwan. Taiwan military recently conducted annual missile drills. (Taiwan Ministry of National Defense via AP)
Shipping containers are seen at a port of Kwai Tsing Container Terminals in Hong Kong, Friday, Nov. 5, 2021.
LEFT: Staxxon Folding Containers hopes its collapsable seaport containers help improve efficiencies and reduce costs and emissions for global supply chains.
A New Jersey-based company with operations in Delaware hopes to bring more efficiencies to the global shipping sector.
Workers in protective suits carry foldable chairs as they head to a locked-down residential complex on Sunday, May 8, 2022, in Beijing. China is staying with a "zero-COVID" strategy of lockdowns and other restrictions despite the economic costs and the fact that many other countries around the world are loosening up and trying to live with the virus. (AP Photo/Andy Wong)
In this photo taken May 2022 released on Friday, May 27, 2022 by the Taiwan Ministry of National Defense, a Taiwan self-made anti-ship Brave Wind II or Hsiung Feng II missile is launched from a war ship in Taiwan's eastern waters off Pingtung County in Southern Taiwan. Taiwan military recently conducted annual missile drills. (Taiwan Ministry of National Defense via AP)
The coronavirus pandemic with all its shutdowns, restrictions and pullbacks has exposed plenty of problems with global and domestic supply chains.
Numerous industries and product lines are overly reliant on too few producers or imports from sometimes adversarial and sometimes unreliable foreign markets — including China.
There may be political and military tensions between the U.S. and China — including over Taiwan and the latter’s alliances with Russia.
But American and West Coast supply chains depend heavily on trade with China with scores of products and critical materials being ferried in metal seaport containers between Shanghai and other big Chinese industrial hubs and major U.S. ports.
Like many of the products within them, the vast majority of seaports containers produced in the world are manufactured in China. “China, right now, makes about 95 or 96% of all the containers in the world, which is actually a big concern for the U.S.,” said Richard Danderline.
Danderline is CFO for Staxxon LLC. The Montclair, New Jersey-based company has developed designs for a folding shipping container that can reduce the costs and logistics of transporting empty containers.
The company, which also has design and product development facilities in Newark, Delaware, also hopes to bite into Chinese dominance of the shipping container sector.
Shipping containers are part of the lifeblood of global supply chains and Chinese control of their production raises worries to what happens to the logistics sector if there are conflicts between Washington and Beijing.
Danderline said Staxxon has 39 patents for its foldable containers. The company has raised $3.5 million and has 20 employees as it tries to bite into concentrated market.
Breaking into the sector is challenging, Danderline said.
The shipping sector is cost conscious and internationally slow to change. Chinese shipping container makers enjoy government subsidies and protections that translate into significant cost savings compared to units potentially manufactured in the U.S.
“There’s virtually no container manufacturing in the U.S. or most any place in the world other than China,” Danderline said.
The market concentration is also an economic and security concern for the U.S. Federal Maritime Commission.
A March report by Maritime Commissioner Carl Bentzel found three Chinese companies (with government backing) make 95% of world’s containers and control 86% of current inventories.
“The global supply chain is too interdependent not to have broad access and manufacturing capabilities for intermodal operational equipment,” said Bentzel in his report worrying about Chinese logistics domination. “The United States should assess whether given market dominance that further trade action be contemplated and whether to invest more aggressively in next generation container manufacturing technology.”
The shipping of empty containers, often because of needs in China, costs $20 billion annually, according to an analysis by xChange Solutions GmbH, a Hamburg, Germany-based shipping container logistics group.
The dynamic stems from significant imports from China and other Asian manufacturing hubs bringing products to U.S. consumers. But then many of the containers shipped back to China are empty. As many as 78% of shipping containers headed to China from California ports are empty.
Danderline hopes that dynamic can also help Staxxon break into the market. The foldable containers can collapse into each other while maintaining their structural integrity when fully deployed. That can free up more space for other containers and the shipment of more needed empties.
Those efficiencies can help reduce the costs and complications of transporting empty containers across the Pacific Ocean.
“It reduces the congestion at the ports,” said Danderline, pointing to the potential reduction in energy use and emissions if tankers are more efficiently and effectively utilized. “There is a big impact on emissions – especially around the piers.”
Collapsing and more efficiently used containers can also reduce trucking and other logistics costs and emissions, the company contends.
Staxxon would look at manufacturing possibilities in North American and European markets (including Poland) once it gets to the production stage.
Concerns about market concentrations of shipping containers coincides with uneasy relations between the U.S. and China over Taiwan, and mistreatments of ethnic Muslims.
The Chinese government also continues to impose restrictive shutdowns when COVID cases are detected in cities with major ports and industrial hubs. Those shutdowns are impacting already challenged supply chains and pricing structures, worldwide including Oregon.
Supply chain logjams at U.S. ports short on workers have also propelled a push in Oregon to develop a $1 billion deep-water port at Coos Bay. The seaport has the backing of federal lawmakers from both parties, including U.S. Rep. Cliff Bentz, R-Oregon, and U.S. Sen. Ron Wyden, D-Oregon.
“The port has the potential to increase West Coast port capacity by up to 10%, which we desperately need so we don’t lose out on tremendous export opportunities,” said Bentz in a statement.
China is Oregon’s largest export market and the port is being promoted as a needed reliever and alternative to busy ports in Southern California, Oakland and Seattle/Tacoma.
Big U.S. companies such as Oregon-based Nike Inc. also have key linkages to China and Asia where they have manufacturing and office footprints.
U.S. firms and sports leagues, in particular the National Basketball Association, also face pressure from human rights advocates to condemn restrictive Chinese COVID lockdowns and the government’s mistreatment of Uyghurs.
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