[161015.EN.BIZ] By 2020, US East Coast Will Equal West Coast in Asia Imports: Zim Chief

BY 2020, Israeli flag carrier Zim reckons that there will be a gradual shift of US imports from the US west coast to the east coast to a point where the proportions will be 50:50, said Zim president and CEO at a Shenzhen shipping conference.

"This will not mean a reduction in west coast volume. A five per cent annual growth in container shipping worldwide will mean that there will be no loss in west coast volume," he said.

Mr Danieli said there had been a 10 per cent transfer of cargo from the US west coast to the east coast during the protracted labour dispute with the Pacific coast dockers union.

"Much of it moved back, but not all," he said. "The east coast had 20 per cent of Asian imports and the west coast had 67 per cent in 2014, but now it has 62 per cent," he said.

Mr Danieli said the key accelerator of the west to east coast import shift will be the opening of the widened Panana Canal and increasing use of the Suez Canal to reach the US east coast and its consumer-rich hinterland.

Another factor encouraging the Asia-Suez US east coast is the shift of manufacturing from China, which has priced itself out of the market for low-end footwear and apparel to more affordable Vietnam, he said.

This trend encourages greater use of Suez. "Yes, transit times are longer, but costs are lower. It depends on the commodity which is more important - and cost is more important than transit in shipping low value cargo which Vietnam produces.

The shift of such production to Indonesia and the India subcontinent is further encouragement for use of the Suez Canal to reach the North American market as it adds volume to the trade flow.

Mr Danieli raised the familiar argument about consumer density being high east of the Mississippi Valley served better by landing cargo on the east coast.

He took the opportunity to introduce Zim's 7 Star Express, which will involved a string from south China, tapping into transshipments from the Indo China and the Indian subcontinent via Colombo.

"The 7 Star Express will go through Suez and the Mediterranean without stopping and on to New York - providing the fast transit times in the market," said Mr Danieli.

Asked from the floor of the TMP Asia conference, why the Zim order book had nothing more than 13,000-TEU, he said that the company had decided not to be a player in the Asia-Europe trade where ships larger than 13,000-TEU would find employment.

Mr Danieli said that the company was dedicated to the North American trade where larger ships would play no useful role until various dredging and bridge raising projects were complete.

Source : HKSG.