[060516.EN.BIZ] LB Port CEO Expects Port Rivalry To Intensify Due To Alliances, Mega Ships

US west coast port of Long Beach CEO Jon Slangerup expects ports to face stiffer competition as the container shipping industry undertakes alliance changes and mergers while deploying more mega ships that test terminals cargo-handling capacity.

"The west coast ports will be good. There is no reason why we will lose share," he said in a report by IHS Media, despite the opening of the third set of locks at the Panama Canal which is expected to draw away cargo to rival east coast ports after June 26.

According to Mr Slangerup, west coast ports have established a significant lead over east coast ports in developing the deeper harbours, larger terminals and most extensive on-dock rail connectors required to handle the big ships. For this reason he is confident west coast ports will regain the market share they lost during last year's labour dispute.

However, the east Gulf coast ports have kept the business lost during the labour strife over protracted contracted negotiations with dockers, and even attracted additional cargo, according to analysis of PIERS statistics measuring market share in the last nine months of March and same periods for 2015 and 2014.

The west coast's share of the fastest-growing and largest type of imports coming into the US fell from 70.1 per cent, before the congestion crisis, and is now in the 66 percent range.

Within the same period, east coast ports increased their share from 27.9 to 31.4 per cent. Gulf coast port share edged up slightly to 2.5 per cent.

For the past several years west coast ports have been handling on a weekly basis vessels with capacities of 12,500 to 14,000 TEU, while the largest ships calling regularly at east coast ports have had capacities of less than 10,000 TEU.

Automation of the Middle Harbour terminal in Long Beach and of the TraPac terminal in Los Angeles, which is developing phase two of its automation project, will more than double the capacity of each of those facilities.

In addition to increasing capacity, Mr Slangerup noted, if automation produces the results that are anticipated, crane productivity will increase and yard and gate efficiency will improve dramatically to the benefit of beneficial cargo owners as well as truckers.

If west coast ports are going to regain and possibly increase market share, labour reliability will be essential. Mr Slangerup is quite bullish about prospects for early talks between the International Longshore and Warehouse Union and the Pacific Maritime Association.

Mr Slangerup also said the ocean and intermodal freight industries must move closer to the airline model of common platforms and information sharing in order to provide seamless movement of shipments from Asia through the US ports to the final delivery to the customer.

Accomplishing this goal when the ocean shipping industry is undergoing the most extensive restructuring of recent decades will indeed be a challenge, he said. It could take the shipping industry up to 10 years to work through these changes and reach equilibrium.

Source : HKSG.