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East Coast ports hit box high

East Coast ports hit box high
West Coast ports are finding that public relations forays to China to get back lost cargo from Asia are no substitute for efficiency and speed of service.

West Coast ports are finding that public relations forays to China to get back lost cargo from Asia are no substitute for efficiency and speed of service.

West Coast ports are finding that public relations forays to China to get back lost cargo from Asia are no substitute for efficiency and speed of service. Los Angeles and Long Beach have again suffered big falls in traffic, while their rivals on the Gulf and East Coast are reporting higher volumes. North Carolina's Wilmington port says container volumes were up 28 percent in the first quarter of its current fiscal year. It is no coincidence that the increased traffic came at a time when Wilmington set a record of 47 crane moves an hour when unloading an Independent Container Line vessel.

And it is also no coincidence that only some of the dockers and administrative staff were members of the International Longshoremen's Association trade union (the equivalent of the ILWU on the West Coast), which has fiercely opposed attempts to improve efficiency. The rest of the staff came from Ports Authority employees, SSA Marine and Independent Container Line.

Wilmington executives says two weekly transpacific services are carrying good volume as they divert North Carolina-destined cargo from competing ports.

The port is so optimistic about the future that a new container terminal is planned about 20 miles south of Wilmington and four miles from the Atlantic Ocean to take advantage of the lower costs and superior service available at Wilmington.

Around the corner at Savannah, imports drove up box tonnage 12 percent in October compared with volumes in that same in 2008, the Georgia Ports Authority said.

In December, Savannah will be added to the Indamex service linking the Indian subcontinent and eastern Mediterranean. The Indamex consortium is composed of SCI, Contship Container Lines and CMA CGM, calling at Tuticorin, Nhava Sheva, New York, Norfolk, Charleston, Port Said and Colombo.

Savannah is used by seven of nine services through the Suez Canal to the US East Coast.

A very different story is unfolding at Los Angeles and Long Beach and the West Coast generally. Los Angeles suffered an eight percent drop in October, and Long Beach 24 percent, while imports fell 14 percent at the five biggest West Coast ports to 852,000 containers and exports were down two percent to 436,000 containers.

Woeful business prompted six West Coast ports to team up in November with the two biggest railway companies on a joint marketing mission to persuade China they are still the natural gateway to the US. Descriptions such as "promising" and "valuable" were used to describe the mission, but no firm contracts were announced.

Other ports continue to snip away at West Coast traffic. Representatives from Mobile, Alabama, met the Panama ambassador the US to discuss expansion of the Panama Canal and the proposed US-Panama Trade Promotion Agreement.

"We have been laying the groundwork to take advantage of the Panama Canal expansion for quite some time," said Jimmy Lyons, chief executive officer of the port. The mobile container terminal, which opened last year, and a new turning basin under construction are designed to handle the larger ships that will be able to move through the canal after its expansion, he said.

Meanwhile, shipping lines continue to cut capacity to the US. New World Alliance is reducing the East Coast route by 4,000 TEUs from December, blaming "challenging" market conditions. The New York Express will be operated jointly with the Grand Alliance.

But, to the dismay of exporters and importers, rates are probably going to rise. Rates in the transpacific will go up in 2010 even though supply-demand economics will most likely not be favourable for ocean carriers, says a senior shipping executive.

"We will increase rates because we have to," said Ron Widdows, chief executive and group president of the NOL Group. "Rates have to increase a lot, and soon, or some carriers will go out of business," he said. Carriers this year expect to jointly lose an estimated US$20 billion.

Even ports are raising rates. Houston is upping fees three percent for container carriers and two percent for other cargo such as equipment, pipes and steel, despite objections from carriers. The hourly rate for using a crane to load or unload containers has risen more than $10 to $600.

Salvador Bruno, a senior vice-president of Hapag-Lloyd, said: "Our losses during the last two and a half years have been tremendous, the highest ever in the history. We have taken on increase after increase. This time we ask that you take into consideration that any further increase in port fees is absolutely illogical."

"We are very upset," said Jerry Nagel, president and chief executive officer of Rickmers (America) of the port fees. "It's the wrong move at the wrong time."

Houston port executive director Alec Dreyer said the port remains competitive and is close to making a loss. "We want to make a level playing field for the people that compete in the port."


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