The largest container port in Britain is near Felixstowe, where a mobile crane rolls up to a stack of shipping containers. The machine grabs the top box, backs it up with a sound, and sets it down on the asphalt. A worker in an orange safety vest kneels, with a loud spray of sparks, saws through a steel bolt that seals the latched door. Jake Slinn, a tall, thin man with a buzz cut and thick-rimmed black glasses, steps forward to peer inside after the door swings open.
Slinn is a cargo buyer. His two-man operation acquires containers filled with abandoned goods shipping lines want to get rid of. Business is booming in his line of work. According to the president of Air & Sea North America at DSV, 3 million containers have been left on ships at ports around the world because of supply chain inefficiencies.
Felixstowe is the largest container port in Britain.
When a product doesn't reach its destination for a period of time, it often loses the value that it originally had. Shipping lines can contact a company like ours to recover as much value from it as they can.
There are a number of ways in which stranded shipments lose value. Food and seasonal merchandise can be spoiled, and machinery intended for a construction project can arrive too late for the job. Goods that are perfectly fine can become worthless if the owner can't retrieve them before the storage fees exceed their value. Paul Vidler, managing director of Crown Salvage in the U.K., says that leaving a container on the quay for six months is frightening.
Sea freight lines are eager to get containers back into circulation as quickly as possible because shipping rates have more than doubled since April. They can only sit if they are full. No one in the supply chain makes money when stuff is sitting on the shelf. They make money when they move stuff.
That is where buyers come in. Depending on what is in the container, they can either charge a fee or pay for it. Slinn has turned over more than 200 containers this year. We are dealing with shipping lines who do not want this problem. They want the containers empty.
It is difficult to say how much the total global cargo salvage business is worth because it is highly fragmented and most participants are private. One of the 10 or so main players in the U.S., Houston-based Salvex, boasts that it has $5.2 billion worth of goods for sale on its online marketplace, though not all is maritime container salvage, as it also disposes of excess inventory.
The size of the buyers profits depends on how they can get rid of what they acquire. They take a cut of the disposal fee when the goods are worthless or dangerous, and they make a profit when the goods have value. Each case is a test of their connections, ingenuity, and intuition. The manifest for the container that Slinn is inspecting has only household goods in it. What does that mean? It is similar to an American reality-TV show. It is something completely different than we were expecting when we open the doors. It is a challenge. Where can I send this? What can I do with this?
As the light filters through the opened doors, Slinn gets his answer. A seven- or eight-year-old Citron sedan is lashed in place with yellow webbing inside. The car has a lot of stuff in it. The owner moved from Africa to the U.K. but then vanished. Even without a title or keys, Slinn thinks the vehicle will have some value and he will sell it to a dealer who will make a small profit.
There is a container with a car inside.
Almost everything can be salvaged by a salvage buyer because of the majority of the world's goods travelling by ship. There are boxes of aluminum take-out pans, bags of rice, and faulty electric scooters in the one-room office of Slinn. He didn't keep any samples from the other haul, which was a shipment of breast implants.
He takes on a load of pumpkin seeds from China that are going to rot, and a few hours later he acquires six tons of cheese, which he will have to wait and see. The rice is packaged for retail sale and approved by health inspectors, and the pumpkin seeds and cheese are fated for AD, a process that creates methane for power plants.
The U.K. is ahead of the U.S. on the surge because it has been hit by two other whammies, including the six-day blockade of the canal by the Ever Given in March. Vidler has been in the business for 45 years. We are getting absolutely swamped.
The market on the side of the Atlantic that is used by the U.S. cargo salvage buyers is lagging behind. Ben Reynolds, the director of transportation abandonment at Salvex, says that volume is about to increase. You are going to have people not paying for containers because they are backed up. The situation at Los Angeles and Long Beach and other ports is a nightmare now, but will get worse during the Christmas rush and persist for another six months.
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Three years ago, Slinn started his company from his bedroom in his parent's house and was still growing. He says that at the beginning, they were worried about their business survival. His business thrived because of the economic disruption. Slinn has an exclusive U.K. contract to handle unwanted containers for a shipping company, but he cannot reveal their name. He has full-time help from his brother and part-time help from his mother, who help him with 5 to 10 containers a week. He expects the figure to reach $1 million next year.
The boom times may not last very long. Consumers in the U.S., Europe, and elsewhere will shift their purchases from goods to services. One reason world shipping rates have started to come down is that that is already happening. If the new Omicron variant leads to new rounds of lockdowns, it could delay a normalization.
Slinn is not worried. He says there will always be containers to deal with. He snapped up a shipment that had nothing to do with shipping delays. The buyer rejected the leather because it was creased. When Slinn made his bid, he only had a few photos to take, but his gamble paid off and he flipped the lot to Vidler for a tidy profit.
Slinn says that they are a one-stop shop. We can get rid of it if it is food waste. We can buy it if it is clothing for resale. Our customers want someone to come in and take the problem off their hands so they don't have to deal with it.
Next, read: Forget Finance. The Pandemic Era requires a degree in Supply-Chain Management.
