The tail wagging the dog

Naval architects are contemplating vessels that can take in excess of 20,000 teu, but the bigger US ports – which have ‘modernised’ – are struggling to handle multiple calls of 12,000 teu vessels that were state of the art only a few years ago.

Carriers continue to soak up ever-larger vessels because of lower per unit costs, however modernising ports is not modular; it requires a long term view. Dredging for deep vessels is only part of the solution and the landside issues, including intractability of labor – which hit the point of raw nerves this past year on the US West Coast – are far more vexing.

A JOC conference, held late last year, exposed some of these nerves. It was suggested by multiple speakers that, even at the biggest ports (which exceed the throughput of New York), terminal layouts and equipment configurations simply couldn’t support what the carriers have in mind.

New York (and perhaps other East Coast rivals) is about a year away from facing down such issues, but the experience of the West Coast – chassis shortages and labor intransigence galore – should be sobering to port planners on all US coasts. Certainly, marketers at the ports may need to speak up more. If infrastructure forms legitimate constraints then value-add aimed at certain cargo categories may be a way forward. Engineering constraints, of the type identified at the JOC event, need not be deal-breakers. Rather, they may inform a strategy of optimising the cargoes that can move through a port.

Economic forecasts for the US are not great, but they are at least decent. The stronger dollar will likely bring about increased imports, meaning that the time for such experimentation is now.

All else being equal, lower fuel prices will reduce the advantage of bigger modern ships. Maybe, a movement away from the bleeding edge, moving to port calls of smaller 8,000 teu-10,000 teu vessels is not such a bad thing.

Ports don’t always have a say in the plans of carriers, but shippers of toys and clothing who are tired of delays and congestion do and the marketplace will route its shipments accordingly.

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