With spot rates at historic lows, carriers “can ill-afford to flood the market with excess capacity,” the London-based maritime consulting firm said in the latest issue of Container Insight Weekly.
A shift of cargo from the U.S. West Coast to the U.S. East Coast resulting from the ability of the Panama Canal to handle larger ships will be gradual, according to predictions from Drewry.
“Without doubt, the ability of the canal to handle much larger ships is a groundbreaking event and heralds a new era in which a large swathe of US importers will have a much wider choice of options routing goods from the Far East. However, it will not all change overnight – the migration of seaborne cargo from the West Coast to the East Coast will continue to be a steady evolution,” the London-based consultants wrote in the latest issue of Container Insight Weekly.
The firm noted how the Port of New York, for example, is not able to handle some neoPanamax ships. When the 10,100-TEU MOL Benefactor, the largest containership to ever use the port, made its maiden call last week, it docked at the GCT Bayonne terminal, the only major container terminal reachable without passing beneath the Bayonne Bridge.
“The American market has become a difficult one to predict and, while demand for East Coast space improved from mid-May onwards, it is impossible to say with any conviction whether this year’s peak season is going to be a strong one or not,” Drewry said. “It has caused the carriers to err on the side of caution. On the one hand, they have introduced larger ships into new loops, but on the other they have removed services.”
Service changes have “pushed the monthly supply of slots in June beyond the half a million TEU threshold for the first time ever, comfortably surpassing the previous monthly record of 495,000 TEU back in August of last year,” the Container Insight Weekly said. “The carriers, however, are aware that with spot rates at historic lows they can ill-afford to flood the market with excess capacity.”
Drewry: Shift in U.S. cargo from West to East Coast will be gradual
