World News
Alliances Launch Asia-U.S. East Coast Services to Bypass West Coast Congestion
Shipping alliances have announced new services between Asia and U.S. East Coast ports through the Panama Canal, seeking to avoid widely reported severe congestion in U.S. West Coast ports, JOC reports.
Around a dozen trans-Pacfic carriers are understood to be introducing three new services each, using ships with capacities of less than 5,000 twenty-foot equivalent units (TEU).
The new services are said to be set to begin later this month.
The services currently proposed will use smaller vessels and add 6 percent to Asia-U.S. East Coast shipping capacity, said Alphaliner.
"This is going to be another watershed moment," said John Wheeler, Vice President of carrier sales at the South Carolina State Ports Authority, discussing the impact of this and last year's heavy congestion at U.S. West Coast ports.
He estimated that 15 percent of business the West Coast trade lost will be permanent.
But Port of Long Beach CEO John Slangerup said a permanent wholesale shift of traffic was unsustainable from a cost perspective.
According to the report, Maersk Line CEO Soren Skou has also said it is not possible to make money using Panamax vessels on long routes.
It is not clear whether the services will become permanent services using larger box ships with capacities up to 14,000 TEU once the Panama Canal expansion is complete in 2016.
"This is a price game," said a spokesman for Maersk Line, saying the carrier would evaluate unit costs, fuel burn, transit times, and freight rates for the new services once West Coast operations are back to normal, which he expects to be within several weeks.
Late last year, carriers were said to be increasingly favouring the Suez Canal for Asia-U.S. East Coast routes.
In addition, a proposed rival canal in Nicaragua may increase competition for Panama.
Last month, experts said the Panama Canal would not be hurt by not catering for box ships with capacities over 14,000 TEU.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 647.00 | 6.00 | 762.00 | 5.50 |
| Rotterdam | 599.00 | 1.00 | 751.00 | 0.50 |
| Houston | 618.00 | 11.50 | 802.50 | 6.50 |
| Fujairah | 642.00 | 5.50 | 883.50 | 5.50 |
| Global 20 Ports Average | 661.50 | 3.50 | 859.00 | 5.00 |
| Global 4 Ports Average | 629.50 | 1.00 | 799.50 | 1.50 |
| Global Average Bunker Price | 719.00 | 3.50 | 915.00 | 7.50 |
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