Drewry: New alliances spur influx of larger ships on transpacific trade

The number of containerships deployed between Asia and the U.S. West Coast with capacity for 13,000 TEUs or more has nearly doubled since the start of 2017, but carriers are still hesitant to introduce mega-ships on the trade.

   The number of containerships deployed on the Asia-U.S. West Coast trade with capacity for 13,000 TEUs or more has nearly doubled since the start of 2017, Drewry said in the latest issue of its Container Insight Weekly.
   The London-based shipping research and consulting firm said its research suggests that the number of containerships of 13,000 TEUs or above serving on the Asia-West Coast of North America trade has increased from 21 vessels in January to 36 in May.
   However, carriers have resisted the urge to introduce mega-ships on the Asia-U.S. West Coast trade. Vessel size on the Asia-U.S. West Coast trade maxes out at 14,414 TEUs, according to data gathered from ocean carrier schedule and capacity database BlueWater Reporting. The three 14,414-TEU vessels operating on the Asia-U.S. West Coast trade are deployed on the OCEAN Alliance’s PRX/SCI, which deploys six vessels averaging 14,171 TEUs between Fuzhou, Nansha, Hong Kong, Yantian, Xiamen, Los Angeles, Oakland and Fuzhou.
   In late 2015, when the 18,000-TEU CMA CGM Benjamin Franklin took a trial run on the transpacific trade, Drewry and others questioned the ability of West Coast ports such as the Los Angeles-Long Beach complex to handle 18,000-TEU containerships on a regular basis, due to concerns over infrastructure, labor, and the ability to efficiently move cargo to and from the port complex via trucks and intermodal railroad.
   The recent influx of containerships of 13,000 TEUs or above on the Asia-West Coast of North America trade has coincided with the April 1 restructuring of ocean carrier alliances, which has reduced the number of weekly services in the lane from 38 to 37, Drewry explained.
   “As more cargo is squeezed onto fewer weekly services, terminals have to prepare for much greater peaks in container activity,” Drewry said. “This problem is exacerbated on the USWC as ships often only call at a couple of ports, unlike in Europe, meaning those U.S. ports have to handle a higher ratio of boxes per ship call.”
   According to Drewry, the fact that Los Angeles and Long Beach handle far more import volumes than exports only adds to the complexity. Import moves require more exchanges between different types of equipment, requiring more time, and more container terminal choreography than loading export containers, the firm explained.
   Drewry also noted that “while the sheer scale of the concentrated container moves generated by the mega-ships at the highly-fragmented Los Angeles-Long Beach complex may appear daunting under ‘normal’ circumstances, conditions are currently less than perfect with major construction projects ongoing.”
   Road closures and detours due to the $1.5 billion Gerald Desmond Bridge replacement project are impacting traffic flows on California’s highways to and from the Terminal Island facilities and will continue to do so until the project is completed next year, Drewry explained. In addition, work is continuing on the $1.3 billion Middle Harbor Terminal Redevelopment Project in Long Beach, which will eventually combine two existing terminals (Piers D, E and F) into an all-electric, fully automated facility able to handle 24,000-TEU ships once the second phase of the project opens in 2019.
   However, the Harbor Trucking Association (HTA), which records the time it takes trucks to exit from any of the 14 Los Angeles-Long Beach terminals from when they first queued outside the gates, said there has not been a significant disruption caused by the construction projects, according to Drewry.
   The HTA did say there were mixed results among the terminals, with better turn times at more automated facilities, while terminals that saw increased business from the new alliance services worsened in April.
   “While the revised alliance set-up appears not to have disrupted operations significantly at the outset, that doesn’t mean there is no risk of future congestion,” Drewry warned. “A combination of bigger ships, high-intensity terminal activity and construction work, particularly in the upcoming peak season summer months, could create some obstacles for importers delivering goods to their final markets.”
   Looking ahead, Drewry said ultra large containerships will come to the U.S. West Coast in time, but carriers should wait until the ports are completely ready for them.
   “In the case of Los Angeles-Long Beach, when most of the disruption surrounding the construction works is over,” Drewry said. “Until then, importers would be wise to monitor the productivity of the various terminals and consider their terminal preference when selecting carriers.”