Mega-ship Challenges and Benefits for Ports

Posted by PortVision

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The mega-ship the CMA CGM Benjamin Franklin called in at the Port of Los Angeles in December, 2015. Capable of carrying 18,000 TEUs and only 80% full, it took four full days to unload 11,200 cargo containers in Los Angeles, ranging from furniture to electronics to toys. It was the largest cargo ship ever to visit the West Coast. Five days later, the vessel berthed in the Port of Oakland in the San Francisco Bay.

In addition to the ports of Los Angeles and Oakland, there are currently three other destinations on the US West Coast capable of handling mega ships: Long Beach, Seattle and Tacoma. By next year, the Canadian Port of Prince Rupert (British Columbia) will be online, too.

As reported in the LA Times and California Sunday Magazine, to prepare for the arrival of a vessel 1,310 feet long, displacing more than 158,000 tons with a keel extending more than 34 feet below the water, Los Angeles port officials, the shipping line, and the dockworker's union planned their logistics for weeks – even while the cargo was being loaded in China and South Korea. Lead times typically run only two days. It was important to the port to avoid the disruption of work bottlenecks so pre-staged rail cars and truck drivers were carefully coordinated; the complex logistics involved harbor pilots and dock workers as well.

Benefits to the West Coast ports are clear. The capability of handling these larger ships will ensure increasing amounts of trade with Asia, bringing more employment for unions and transportation lines. Although the Panama Canal is being expanded, its new canal will only accommodate vessels carrying 13,000 TEUs. As shipping lines move to larger vessels for their cost efficiencies, they will seek out locations, globally, that can support them. Quartz reports that vessels capable of handling 21,000 TEUs are now in production.

Terminals around the world are facing challenges from these larger ships. Stresses on port infrastructure are common: there is a need for deeper channels, larger cranes, more dockworkers for unloading, truckers and rail lines to haul the goods. Counter-balancing the benefits of welcoming larger ships, these complexes look at the ROI of infrastructure improvement in light of a downturn in the shipping industry, as world economies struggle. Moody's Investors Service predicted that for 2015 global container ship capacity would increase about 9% while demand growth would be less than half that number.

The Wall Street Journal reported in February that the Port of Hong Kong is being skipped by more container ships due to its shallow channels, high cargo handling costs, and busy harbor. (“Hong Kong's Port Falls Further,” February 17, 2016, p. B7.) Shenzhen, Shanghai and Ningbo terminals are picking up some of this trade as Hong Kong saw a decrease in its traffic of 9.5% in 2015 and has fallen to #5 where a decade ago it was the world's busiest.

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Posted on Apr 19, 2016 6:07:00 AM

Topics: Blog, News, Tankers, Supertankers, ports, Container, Terminals