Greg Knowler, Senior Asia Editor | Nov 28, 2014 2:14 AM EST
There will be no speedy solution to the congestion that is creating bottlenecks at ports around the world as terminals battle to cope with growing trade and surges in container volume.
Stanley Smulders, senior vice president for Asia-Europe and West Africa trade management for G6 Alliance member MOL, said larger ships and the complicated alliance structures were making life difficult for terminals, and the problems would not be solved easily.
“The lead time to expand a terminal is much longer than buying a ship. A lot of terminals were built in the late 1980s or 1990s with a different type of vessel in mind so the yard capacity is limited in terms of working with the throughput being brought in by the big ships,” he told JOC.com.
“And the throughput per terminal is going up per ship call, even though there are fewer calls per ship.”
Port congestion has built steadily this year as exports from Asia increased. Greater volumes carried on bigger ships have created surges in containers arriving for loading or off-loading at peak times, especially at the transshipment hubs that are the only ports that can handle the vessels. It is difficult to fill a large container vessel so the operators are members of alliances. This further complicates the transshipment process at hub ports and ads to the congestion.
“It is not just a matter of the individual alliance members, either,” Smulders said. “All the alliance members are also serving other non-alliance lines that they need to connect with once arriving in a port. Ideally, a terminal needs to have all the services together, but if you have six lines with six different services each connecting with other trades it just increases the complexity.”
The big ship-alliance issue is creating havoc at ports across the world. In Asia, Shanghai has been able to handle fewer large container vessels that take up too much berth space, but the real problems in the region are at the ports of Hong Kong and Singapore.
“There is so much transshipment volume that they struggle to keep up with the large number of vessels that have to make their connections. The terminals try to keep as many related services on one terminal, but it is almost impossible. In Singapore, the G6 occupies three terminals, so there is a lot of shunting between the terminals. The port even runs ships between its old and new terminals.
“On top of that, with the revenues low in the last few years, there was not much incentive for lines to recover lost time so vessels often arrive in port late. When they arrive late and the export containers are being delivered on time, you see congestion building, and in Asia the yard capacity is very tight.”
Smulders said in Europe, Hamburg was a popular port but was not built for big ships. The air draft is too high for bridges, the river is not wide enough to allow the ships to pass and there are limited access windows because of draft restrictions.
Rotterdam struggled with congestion after changing systems at their terminals and may have misjudged the peak season volumes, but two new terminals coming on stream in 2015 will add capacity. Felixstowe and Southampton have also struggled to handle the rising volumes experienced on the Asia-Europe trade this year.
Addressing the U.S. West Coast port congestion, Smulders said the big ship problem was heightened by the labor unrest, the lack of drivers, and lines losing chassis ownership.
“There are so many issues on the West Coast that it will not change overnight,” he said.
What is needed to address the issue is investment in the terminals, and Smulders said as time passed the investment would begin to come in. He gave Singapore as an example, where in the port plan the old terminals will become obsolete and a new port will be built with twice the existing capacity.
“They will be building terminals that can handle the mega ships and have the turn-around space and yard capacity to enable alliance members to connect. It is fortunate that Singapore is capable of doing that, but most ports in the world cannot build an entire new port and shut down the old one,” he said.