Seems like it was just yesterday that we were reading one of Peter Buxbaum’s insightful analyses on cargo movement. But it wasn’t, it was his commentary in the December 1997 issue of Inbound Logistics that caught our attention again.
Peter interviewed some pretty bright people in that issue, and here’s what they had to say about giant ports and giant ships.
1. Commander Jon S. Helmick, Director, U.S. Merchant Marine Academy Logistics Program.
“Just in time delivery systems represent one of the key pressures on ports. The last thing you want is for the port to act as a bottleneck. Instead, ports must facilitate the rapid throughput of cargo … Most ships in service will be much smaller. Some carriers are not interested in megaships because of their disadvantages. They are limited in their routing flexibility and it is difficult to keep them regularly filled with cargo. Much of the movement toward larger ships and the ports’ competition for that traffic involves ego and the corporate fanning of feathers.” [Bingo!]
Another big issue is dwell time, he said. “Containers average several days in port before they are moved out. Reducing dwell time is more critical today than ever, with environmental and regulatory constraints to terminal expansion. If you cut the dwell time in half, you double the effectiveness of the port.”
2. Jim Reese, Director of Communications at the Port of New Orleans.
“Megaships are not going to be entering the Gulf of Mexico and won’t be coming to the Port of New Orleans. They will be very expensive to operate and will be required to move a lot of cargo. Now more than ever it will not be economical to bring them into the Gulf.”
3. Don Bose, Logistics Manager, Bose Corporation, believes the pendulum may eventually swing back to favor smaller ports and smaller carriers. “What happens when the megaships land?” he asks. “The ideal is to bring the containers off the ship and put them on rail. But the question is, what happens when vessels get too large? We have seen the same thing in other modes – whether in the length of trucks, railcars, flatcars, containers or planes. There comes a point when large vessels create problems. We may be at that point now with ocean vessels.
“Larger ships mean fewer ports of call, which means shippers have to transport containers over a longer distance to get to a port. There is also a question of putting all of our eggs in one basket, from a risk standpoint. What if the ship breaks down? Eventually, bigger ships may end up losing business to smaller ships.”
And the more things change, the more they remain the same. We’ve been describing our patented systems for smaller, more efficient and more profitable container ships and terminals for more than a dozen years, but efficiency, profit and dwell time mean nothing to corporations and CEOs. The “corporate fanning of feathers” is the only thing that has ever mattered to them.