From SCDigest's On-Target e-Magazine
- March 10, 2014 -
Global Supply Chain News: East Coasts Ports Continue Race to Handle Larger Ships
New Sailings from P3 and G6 Networks to Create Pressures Soon even with Panama Canal Delay; Depths, Tides, Port Rotations and More
SCDigest Editorial Staff
Major East Coast ports are continuing with varying degrees of success or rather speed to upgrade their capabilities to handle larger ships and process more containers.
The size of ships generally has of course been on the rise for a number of years. But East Coast ports were give a real wakeup call when the planned expansion of the Panama Canal was announced in 2006, a move that will allow much larger ships through the Canal, most of them headed to the US East Coast.
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Miami expects to have its 50-ft channel completed by 2015, while Savannah, Charleston, Jacksonville and Port Everglades are at least three years beyond this, and in some cases nearer to the end of the decade.
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Most of those ports at the time would not have been able to handle many of the larger ships.
The Canal project's completion has now been pushed back again, until early 2016, while several ports are engaged in dredging and other projects they hoped to complete around mid-2015.
But even with the latest delay in the Canal project, there may be pressure on US ports even earlier anyways, due to recent change in container line consortia. Last year, Maersk Lines, the world's largest ocean container shipping company, formed an alliance with its two next largest competitors (Switzerland's Mediterranean Shipping Co. and France's CMA CGM) to share capacity on major shipping lanes in an arrangement it calls the P3 network (the companies are still awaiting regulatory approvals for the move).
Late last year, a rival consortium called the G6 network (Hapag-Lloyd, NYK Lines, Orient Overseas Container Line. Hyundai Merchant Marine, APL and Mitsui O.S.K. Lines) announced it was beefing up its route schedule to better compete with P3.
The net effect of all of that is the by pooling services, both networks will likely be in a position to sale larger ships handling at least 8000 TEU, versus the smaller ships that largely call on US East Coast ports currently. The cost efficiencies of the larger vessels are a key driver of the potential benefits to the container lines from the consortia.
If all goes well with the regulators, both the P3 and G6 networks plans to start sailing by the end of Q2 this year.
Just how large a ship a port can handle turns out to be a more complicated question than might be thought. The most important attribute, of course, is how deep the water is in the port area and any channels leading to the docks, usually measured as the depth at low tide.
But how a ship is loaded also impacts its draught. For example, according to Drewry Shipping Consultants, a number of current East Coast ports are now servicing ships that can hold 9000+ TEU on Asian all-water services via the Suez Canal, but that is because "the inbound cargo tends to consist of relatively low weight consumer goods, and outbound vessels have significant empties aboard, so maximum draught is never reached."
(Global Supply Chain Article Continued Below)
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