Bursting at the Seams

“Future Need of Mega Container Ships Questioned.” This issue was raised in the FINANCIAL TIMES by an Asian reporting service earlier this year. At Navis World 2004, Neil Davidson of Drewry Shipping Consultants raised this same question and warned that commercial limitations would reduce the effectiveness of these giants in the future. Nolan Gimpel of Axiom Consulting is on record as saying that mega-ships strain the capacity of inland infrastructure, terminal operators and rail and truck carriers.

We were forewarned about the harmful effects that oversized ships would have upon the supply chain as far back as 2000, and this website has reviewed those advisories. Conrad Everhard and Jim Hartung were among the first to foresee the congestion and infrastructure breakdowns that would be caused by Postpanamax box ships, but they were looked upon as alarmists.

A not-so-distant voice now merits consideration. From a closer vantage point, Peter Hurme, of MARINE DIGEST and Cargo Business News, offers this evaluation in his “View From THE LIGHTHOUSE”. Here are some direct quotes from his most recent column:

“North America is seriously, no, severely, challenged right now with its transportation network. Too much more Asia icing on the cake and we could see it collapse.

“The $ 284 billion transportation bill recently passed by the House is about halfway to where it needs to be, with too little covering highway improvement and maintenance. Transportation Committee Chairman Don Young, R- Alaska, was quoted as saying the bill does not solve congestion problems that result in $ 67 billion in lost productivity and wasted fuel annually. ‘We probably need $ 500 billion to make sure this country keeps moving,’ he said. President Bush, who has reportedly been poised to veto the bill if it were to go over $ 284 billion, does not seem to realize this country is headed towards a transport infrastructure meltdown. There is not enough federal money being doled out for commerce security, so where does that leave the rest of the transportation system? There is a costly war going on in the Middle East draining federal funds, and now you start to hear a different message coming out of the consulting engineer sector that used to talk about developing big port infrastructure. Now the mantra is ‘sustained port development.’

“Indeed. Things are bursting at the seams perhaps more than many people know. How many TEUs a port handles in a given month, quarter or year pales in comparison now to getting containers moved — so that U.S./North American international trade doesn’t run smack into an even bigger wall of congestion.

“Unfortunately, this is not an editorial offering suggestions, but is merely a call to arms regarding the aforementioned transport issues. We at MARINE DIGEST and Cargo Business News strongly urge the industry to respond to us with feedback to share with our readership. Right now, it seems, the bigger the box count, the bigger the problems.”

Peter is to be commended for urging his readers to go public with their suggestions and recommendations through his journal. He correctly assesses the undesirable effects that overly large vessels are having upon our ports and inland transportation system, and finishes by offering subtle criticism and worthwhile advice to besieged authorities. His lead in lines are right to the point:

“U.S. marine terminal operators need to implement new systems”

“Time to make the change”

“‘Automation’ implementation was one of the key victories for employers to come out of the last round of the highly contentious PMA-ILWU negotiations on the West Coast. It had to happen, and it’s good that it did.

“Thing is, they need to start this implementation. Jim McKenna, CEO of the Pacific Maritime Association, admitted to a packed house in Los Angeles last fall that many PMA members were slow in adopting new technology and processing systems. Labor needs to see the light here, too.

“Greater efficiencies gained within existing cargo-handling densities is going to be an absolute must; especially on the West Coast where the tsunami of trans-Pacific containers returns each year.

“In my recent conversations with those in the terminal systems and equipment sectors, the one common thread that comes up is terminal operators have not yet instigated strong plans that will allow for needed change. They are also slow in adopting new types of environmentally and productive types of yard equipment and systems; still ordering more traditional types of assets. Automation was won, but did those who pushed for it think through what they really wanted out of this victory?

“It’s possible that part of the problem is that fear is causing some of the inertia on both sides. Employers fear ILWU reprisal and labor fears change. It is time for both sides to drop those fears. Employers are offering safer jobs out of the yard for ILWU members; an opportunity for them to get better educated in the high-tech world of the 21st century. Fewer accidents in the yard with lower- emission equipment and only a marginal increase in the cost of this equipment will make for a sunnier long-term return on the overall investment.”

Peter covered the entire spectrum in just this one article:
• All of North America is under the gun.
• TEU increases (bigger box counts) could collapse the transportation network.
• The impoverished transportation infrastructure will not be shored up by federal funding.
• Multi-billion dollar economic losses are caused by congestion and inefficiency.
• The nation’s president is unaware of the gravity of this impending transportation meltdown.
• Lack of sufficient funding has a negative effect on port development.
• Labor and Management recognize the need for compromise.
• Terminal operators are ready, willing … but not yet able, because no road is open to them.
• Labor is ever fearful that an unknown, yet-to-be discovered technology will eliminate jobs.