New Ocean Carrier Deployments May Have Slight Impact on U.S. Supply Chains

By Patrick Burnson, Executive Editor
April 21, 2014 - SCMR Editorial

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

image
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 .(JavaScript must be enabled to view this email address).

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!

Recent Entries

When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Global trade management technology provider Amber Road (formerly known as Management Dynamics) said this week it has acquired ecVision, a cloud-based provider of global sourcing and collaborative supply chain solutions.

While it is already reaping myriad benefits from ORION (On-Road Integrated Optimization and Navigation), a proprietary routing platform for its drivers rolled out in late 2013, transportation and logistics bellwether UPS announced big plans for the technology this week.

Diesel prices continued their recent stretch of gains with a 3.6 cent increase this week to $2.936 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

TSA has reaffirmed its March 9 general rate increase (GRI) of $600 per 40-foot container (FEU) for all shipments, and lines have also filed a previously announced April 9 GRI in the same amount.

Article Topics

News · Ocean Freight · Ocean Cargo · seaports · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.