In an interview, Jock O’Connell, Beacon Economics’ international trade advisor, told AJOT that the growing number of mega-container ships that are being delivered to ocean container carriers in 2017 and beyond are bound to benefit West Coast ports, including Long Beach, Los Angeles and Oakland, because “there are no ports on the East Coast and Gulf, at present, that can handle ships of this size.”
Despite the fact that California ports have lost market share to ports such as Houston, New Orleans, Charleston and Savannah, “this is partly a function of the increased location of manufacturing in Southern States by global manufacturers. In the long-term, container volumes are going to continue to rise at California ports, especially with the arrival of the mega-container ships.”
Another contributing factor is the expanded Panama Canal that is encouraging larger ship sailings to U.S. Gulf and East Coast ports. However, the Panama Canal does not have the capacity to handle container ships over 14,000 TEUs.
Houston, O’Connell noted, has seen a major increase in container volumes as a result of increased manufacturing and the Panama Canal widening.
Nevertheless, O’Connell emphasizes that “ports are at the mercy of the ocean carriers,” and “as these ocean carriers have to utilize more of the 18,000+ TEU container ships that they have been ordering, then more and more of these ships are going to find themselves on the Asia to West Coast trade.”
This view is shared by Alphaliner’s Tan Hua Joo speaking at this year’s Trans Pacific Maritime (TPM) conference in Long Beach. Tan said that a flood of new 18000+ container ships are being delivered in 2017 and 2018 and that this will flood the international container market with new excess capacity.
The response by ocean carriers will be to continue scrapping smaller vessels to accommodate the larger ones…
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