A combination of circumstances—a congestive perfect storm - has afflicted container handlings at ports in such disparate centers as Los Angeles/Long Beach and New York, and threatens the growth of intermodal movements. Port shippers are complaining about backups and the associative costs, especially demurrage charges for containers that exceed free time.
The gridlock goes beyond the coasts. In Chicago, the Midwest cross-section where US railroads interchange traffic, the rail system has been in gridlock for some months. An enormous grain harvest in the Upper Midwest has combined with the growth in oil and oil-related shipments associated with new fracking projects in North Dakota and Canada to overwhelm a system with little slack. Chicago is also the hub for intermodal growth.
Adding to the misery, dockworkers in the Pacific Northwest (Seattle/ Tacoma) have initiated a slowdown that cuts productivity nearly in half. West Coast dockworkers have been working without a contract since May.
Negotiations aside, the principal near-term culprits are an ongoing shortage of truck drivers and the lack of available container chassis at the ports. Maersk stopped the practice of providing chassis some time back, and most liner operators have followed suit. The continued arrival of larger ships disgorging large numbers of boxes at one time promises to worsen the problem, as does the possibility of an acceleration of economic growth.
Steady growth in US intermodal business over several years appears to have caught up with the available infrastructure in key parts of the system. The railroads have steadily invaded the domestic market as well as handling the up-and-down international market. More shipments are flowing through a network that was not designed for the volume.
Adding to the discomfort are the prospects of another cold winter and a 2015 container vessel orderbook filled with deliveries of ultra-sized ships.
For a silver lining, there is Savannah, tucked away on the Southeast Coast. Savannah has challenges ahead in dredging for future large ships transiting the Panama Canal and in finding a way to pay for the improvements, but for the present it is considered a relative model of operating smoothness. Nearby Charleston, too. Savannah works to turn a large vessel around in one day, compared to three or more days in Southern California because of larger exchange volumes and the congestion.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
|Add Seatrade Maritime News to your Google News feed.