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SIGNS
of a subliminal the battle of ideas that
has been going for years between proponents
of the Suez or Panama canals for delivery
of Asian cargo to the US east coast, recently
broke into the open at the American Association
of Port Authorities (AAPA) convention in
Tampa.
It
has long been known that the Panama expansion
to more than double its capacity loomed,
and still looms, as a serious threat to
LA-Long Beach, and indeed to all US west
coast ports, in their role as the main gateway
to the consumer-rich heartlands east of
the Mississippi because of high overland
rail and road costs.
Since
2006, the promotion of their "keep-it-water"
sales mantra saw the Port of Savannah volumes
of Asian cargo grow robustly on the all-water
route as west coast Asian throughput growth
was tepid.
But
the Panamanian hunter has become the hunted.
The new threat, not only to the US west
coast ports and its railways, but also to
the once threatening Panama Canal, has been
the growth of volumes of US east coast-bound
Asian cargo coming through Suez.
Six
years ago, the champion of the all-water
route via Panama, the Port of Savannah,
dismissed the Suez threat raised by the
Hong Kong Shipping Gazette at the time,
arguing that it was only be useful for US
east coast cargo coming from Singapore and
points west. A Hong Kong-based Kuehne +
Nagel man said much the same a year later
that he would only seek that route "in
peak periods when there was no other way".
But
many a tune has been changed since. At the
Tampa AAPA convention, Maersk's Dean Rodin
said the P3 service will send one service
through Panama and three through Suez, but
until that mega alliance gets a regulatory
go-head, Asia to US east coast cargo will
go through Suez.
So
even if the P3 mega-alliance wins the approvals
of the US, EU and Chinese regulators - hardly
a done deal, and likely to be a qualified
one at best - much of Maersk cargo will
still go through Suez.
Once
the great hope of shipping, the Panama Canal
has been beset with problems. Its 2014 opening
plan is long lost and so has an opening
in 2015 less likely. With cost overruns
on its principal third lock construction,
fresh problems loom, and now, there is a
little agreement on how the overruns will
be paid and contractors threatening to strike.
And
while expansion from 4,500-TEUers once forecast
to double in early days has been since increased
to 13,200 TEUers, it still does not match
the economies of scale achieved by the 18,000-TEUers
afloat and the 19,000-TEUers on order coming
through the anything-goes Suez Canal.
Curtis
Foltz, the Georgia Ports Authority chief,
and ruler of Savannah, said his group's
forecast is that there will be a gradual
shift in traffic, saying that Suez will
remain a big rival to Panama. "Suez
is definitely a route that Georgia relies
on, with the number of services to Savannah
increasing by 80 per cent over the past
five years and all 11 east coast-Suez services
calling at Savannah,?said Mr Foltz, reported
New York's Maritime Professional.
Still,
Panama promotes itself as cheaper than Suez.
Oscar Bazan, vice-president of the Panama
Canal's planning and business development
department, told the conference that the
cost per box for a 12,000-TEU vessel will
be two per cent less for cargo from Asia
to Houston and Dallas, making it much cheaper
than going by rail or truck from the west
coast. Houston and Dallas are a bit of comedown
to long-ago boasts of the savings made to
Savannah, Charleston and New York-New Jersey.
Despite
troubling signs, Manzanilla port vice president
Carlos Urriola is confident. Mr Urriola
said that his port on the Pacific side of
the canal is keeping to its plan to increase
capacity from 2.5 million TEU to four million
TEU, at a cost of US$270 million.
Manzanilla's
new rail mounted gantries will have a lifting
capacity of 40 long tons, be capable of
30 moves an hour, have a positioning accuracy
of 25 millimetres and have anti-lift sensors
to stop vehicles being lifted above 0.5
metre. Feeder vessels accounted for 46 per
cent of all moves at the port in 2013. But
will this be for nought?
According
to Maersk, the expanded Panama Canal will
increase berth productivity by as much as
70 per cent for regional users, raise fuel
efficiency by 40 per cent and reduce CO2
emissions by 40 per cent for each TEU/kilometre.
Again, will it matter in the face of Suez
threat?
The
Panama Canal authority forecasts that in
2018, 12 per cent of the world's container
fleet capacity will be post-Panamax, 39
per cent Panamax or less and 49 per cent
"neo-Panamax", which is the designation
for 13,200-TEU ships.
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