US west coast labour dispute leads to permanent shift in cargo
Despite cargo operations returning to levels near normal at US west coast ports following months of disruption amid its long-running labour dispute, there are signs that some shippers have moved to permanently divert cargo to Atlantic coast and Canadian ports as a result of the nine-month impasse, according to analysts.
A new study conducted by SeaIntel concluded that although preliminary volume figures for April suggest the situation has stabilised on the west coast, throughput numbers are lower than expected when considering overall growth rates across the US and previous trade patterns.
The three Pacific southwest ports of Long Beach, Los Angeles and Oakland handled combined volumes of 2.1m teu in April, down 38,000 teu on year, but also 45,000 teu less than what should be expected if the growth rate had been the same as during the first quarter of the year, noted SeaIntel.
“This indicates that some shippers have diverted their cargo to other regions," it said. In January and February, during the US west coast labour dispute, SeaIntel noted how diverted cargo accounted for roughly 10% of monthly volumes. “It now seems to be around 2%-2.5% of the Pacific southwest ports’ ‘normal’ volumes that have been diverted... a far cry from the levels of up to 20%, which some industry commentators had speculated about,” it said.
Much of this cargo has been diverted to the Atlantic seaboard and because of this and increasing volumes from Europe, throughput at ports on the US east coast are on the up. Much of this cargo has been diverted to the Atlantic seaboard and because of this and increasing volumes from Europe, throughput at ports on the US east coast are on the up.
“Instead it has been spread very evenly across the Atlantic coast ports,” it said.
Meanwhile, in the Pacific northwest, the Canadian ports of Vancouver and Prince Rupert, which were unaffected by the labour dispute, saw volumes shoot up during the first quarter of the year, at the expense of Seattle and Tacoma. However, overall volumes in the Pacific northwest, including both US and Canadian ports, were also up, suggesting that both Vancouver and Prince Rupert had also taken cargo from ports in the Pacific southwest.
SeaIntel said the shift from the American Pacific northwest ports to the Canadian ports does not seem to be permanent, while the cargo diversion away from the Pacific southwest ports seems to be longer-lasting. SeaIntel added while it is difficult to put a definitive figure on the volume of cargo that has been diverted, its analysis clearly shows it is a significant number of containers. However, it said at this stage, it is far too early to determine the long-term impact of the US west coast labour dispute.
Hobart switches $33m earmarked for shipping over to rail
Tasmania has re-allocated $33m previously set aside for a direct international shipping service into rail infrastructure. This funding will go to secure $59.8m from the Commonwealth for the Freight Rail Revitalisation Program, which requires a 50% co-contribution from Tasmania.
It is claimed the program will better enable Tasmanian freight to reach export markets by moving containerised freight, and transporting bulk goods from points of extraction, to the island’s ports for shipping. TasRail will direct the project which will upgrade major lines on the Tasmanian rail network through selective re-sleepering, replacing old rails and bridges and strengthening culverts / drainage.
Already this year, co-investment by the Federal and Tasmanian government has enabled TasRail to progress its new $7m freight terminal development at George Town, and contribute to the $12m Burnie Port Optimisation Project in partnership with TasPorts and its private enterprise partner, Toll. TasRail currently operates a freight and logistics hub at the port of Burnie which is the terminus for bulk ore from all of TasRail’s customers in the mining sector.
The company is also responsible for the Burnie shiploader at berth 5, which is the only common-user bulk-ore loading facility in the state. The company currently hauls 68% of contestable land freight on the Hobart to Burnie strategic freight corridor and 25% of Tasmania’s total land freight task.
The international shipping service initially was set to receive the $33m in funding but was made redundant by the Federal government’s decision to extend the Tasmanian Freight Equalisation Scheme to international exports.
Indonesia’s internal freight upgrade plan will open trade opportunities
Indonesia’s government is seeking $60bn in investment for container port infrastructure, Australian delegates to the SMART Conference in Melbourne were told last week. Mark Millar, managing partner at consultants M Power & Associates, said the port infrastructure investment plan included a new domestic shipping system for transporting cargo between the many islands of the Indonesian archipelago.
Jakarta wants half of the $60bn to be funded as foreign investment, he added. Mr Millar called Indonesia a “rising star of the ASEAN countries” in a presentation at the SMART Supply Chain and Logistics Conference. The archipelago-nation, he said, could be one of the most promising markets in Asia for companies seeking low-cost manufacturing and on-the-ground supply chain systems.
Mr Millar offered two key reasons for manufacturers to look more closely at opportunities outside China – labour and location. He referenced global supply chain managers Li & Fung in saying current manufacturing migration is made up of 25% of companies claiming to be exploring inland China, 25% exploring offshore and with 50% still focused on coastal China. Mr Millar provides a consultancy on China supply chain strategies for clients.
He is a visiting lecturer at Hong Kong Polytechnic University and has been a guest speaker at Georgia Tech, RMIT, SP Jain and HKU Space in Hong Kong.
Port of Melbourne announces new charges and tariffs
Declaring that it has responded to customer feedback, the Port Of Melbourne Corporation (PoMC) has announced that loaded international container export charges have been held at last year’s rates. “In practical terms, wharfage charges have been frozen at last year’s rate for loaded international exports while loaded imports increase by a CPI increment of $1.78 for a loaded teu to $66.68 (plus GST).
Wharfage on empty containers increases 44 cents to $16.54 (plus GST),” PoMC chief executive officer Nick Easy said: Other charges have been adjusted by “CPI only”, reads a statement from the port. It also pointed out that last year’s price increase was less than 1%.
The overall tariff increase of 2.75% matches the consumer price index forecast announced in the 2015/16 Victorian state budget. Specific items include wharfage fee on motor vehicles going up by $1.04 on average while channel fee discounts for multi-sailing vessels such as Bass Strait carriers have been kept “but at a marginally lower rate”.
And, the port adds, such operators continue to be exempt from the Channel Deepening Infrastructure fee for movements between Tasmania and Melbourne. It’s bad news for cruise though as the discount on channel fees for passenger vessels will reduce from 20% to 15%.
And, the port adds, the forecast under-recovery of the Port Licence Fee of about $1m will not be recovered by the new tariff charges, but will instead by met by increased efficiency at the port. And, the port adds, the forecast under-recovery of the Port Licence Fee of about $1m will not be recovered by the new tariff charges, but will instead by met by increased efficiency at the port. Also commenting on the price tariff was Victorian state treasurer Tim Pallas, who this morning (May 27) welcomed the tariff changes and described them as enhancing the port’s price competitiveness.
The new charges will apply from July 1, 2015 Substitution of 40' General Purpose containers with 40' High Cube containers in Fremantle and Adelaide
Maersk Line would like to advise our customers that effective immediately, 40’ General Purpose (GP) 8’ 6” containers will not be available for export and import bookings through Fremantle and through Adelaide. Instead, the 40’ General Purpose (GP) 8’ 6” containers will be substituted with 40’ High Cube 9’ 6” containers for export and import bookings in Fremantle and in Adelaide.
DP World Australia to increase capacity at Brisbane terminal by 2017
DP World Australia (DPWA) will increase capacity at its Fisherman Islands Terminal by 14% to 720,000 teu once two newly-ordered automated stacking cranes (ASCs) are commissioned in 2017 and module one is activated. The units will be assembled at Fisherman Islands during 2016 and commissioned the following year. A spokesperson for DPWA told Lloyd’s List Australia that it has always been the plan to bring new modules online as they became needed.
The two new units will join a fleet of 14 Kalmar ASCs already installed. DPWA said the number of waterside exchange lanes at the terminal will increase from 28 to 32 once module one is online. And the activation is also said to provide an additional five lanes to reduce truck turn-around times. A Kalmar Australia spokesperson said the two ASC units will be delivered to the Fisherman’s Island Terminal in 2016 as a knock-down delivery.
DPWA chief Paul Scurrah said the stevedore has seen high waterside productivity in the past six months and a “more consistent operational performance from our ASC and straddle terminal.” “We are confident that trend will continue. “The addition of module one will deliver improved quay crane productivity and vessel schedule integrity, creating a clearer path for our shipping line partners and for Queensland importers and exporters,” Mr Scurrah said.
