Drifting and Dreaming (A reprint of Vol. XVII, Art. 40 … Four years ago today, Dec. 31, 2008)

A report provided by the Dutch firm Dynamar, called “Panama Canal Container Trades: Past, Present and Future,” predicts that volumes to the U.S. East and Gulf coasts from the Far East could climb from 3.2 million TEUs today to 15.7 million TEUs by 2020.

“Our conclusion,” wrote the managing editor, “is that soon after the expanded Panama Canal opens for business in 2015, ultra large container ships of over 10,000 TEU up to the new Panamax size of 13,000 TEU will start using the waterway.”

The editor stated further that while trans-Suez volumes from Far East ports will grow in the next few years because of limited capacity at the Panama canal, much of that cargo could switch to trans-Panama routings after the expanded canal is opened.

The East Coast ports involved have to worry about having sufficient water depth and large enough cranes, he said, and he predicted a switch to the much larger ships because carriers will want to take advantage of the “economies of scale”.

Naturally, U.S. port authorities will push for as much taxpayer funding as possible so that all this cargo can be delivered through their newly-expanded ports to demanding American shoppers.

Maybe they don’t have newspapers in Holland.

This editor, like so many other pundits, is hallucinating. Someone should send him a copy of the latest best-seller, “How to lay up a ship”. Or at least, someone should point out to him that:

– So far this year, there has been a 37 % decline in orders for new container ships;

– … and that Hanwha can’t find the funds to purchase Daewoo Shipbuilding and Engineering;

– … and that the ports at LA and Long Beach have had an unanticipated 19 % drop in TEU volumes during this holiday season;

– … and that the Port of Hong Kong had a 13.2 % drop in that same period;

– … and that Maersk and other carriers, not expecting this disastrous economic downturn, are laying up hundreds of thousands of idled TEUs;

– … and that Hans Berger, the CEO of HSH Nordbank, the world’s largest provider of shipping finance, has resigned in the wake of the global financial crisis.

[Dreamers like this fellow need to be told that those aren’t container ship lines that we’ll be seeing circling the globe in 2015 … those will be bread lines.]