Shippers may expect subtle shift in ocean carrier deployments

The newly created and expanded alliances of P3 and G6 will certainly review and revise port calls, but the shift in initial deployments will be subtle, says Neil Davidson, senior analyst of ports and terminals for Drewry Research.

By ·

The newly created and expanded alliances of P3 and G6 will certainly review and revise port calls, but the shift in initial deployments will be subtle, says Neil Davidson, senior analyst of ports and terminals for Drewry Research.

“However, it is in the carrier’s best interest to serve as many ports directly as possible in order to offer the best service to cargo owners,” says Davidson.

Furthermore, Davidson says that carriers will still call on all the key ports where there’s a concentration of consumers. “So in this sense there may not be much change to the list of ports called. But bigger ships do mean reduced service frequency, or at least less port calls per year, leading to more peaking of port volumes.”

Davidson says that anticipation of a breakdown in dockside labor contracting on the U.S. West Coast should also be considered when discussing the state of the ports this year. “I imagine that most shippers, through past experience of similar issues, have contingency plans in place for diversions if necessary. Shippers will adopt a wait and see approach though,” he says.

Finally, Davidson adds that the impact of the expanded Panama Canal still remains to be seen. “East Coast U.S. ports are hoping to gain share from the West Coast ports, but they won’t give it up easily,” he notes. “Plus, it’s not just about port capacity, but also about inland and intermodal capacity.”

In addition, there are two key unknowns about the future, says Davidson. First, the level of the new Canal vessel tolls is yet to be determined, and we have yet to see how the U.S. and Canadian railroads will react to the expanded Canal.

“Both of these will have a big influence on which way cargo is routed,” says Davidson. “Most likely time sensitive cargoes will continue to move via the West Coast, but cost sensitive cargoes will be more tempted to use the Canal.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Ocean Cargo · Ocean Shipping · Seaports · All Topics
Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo