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More
significantly, there is the success of Cosco
Pacific's Piraeus port near Athens, a major
player in the southern front in this game,
fanning feeders into the Adriatic, the Aegean
and into the Black Sea. This together with
initiatives of the northerly-southern European
ports - that is, Genoa and Marseilles, on
the west side of Italian peninsula and ports
like Koper and Venice to the eastside in
the Adriatic. This is combined with lesser
attempts by Constanza in Romania and Bacelona
in Spain.
The
reason for this counter-intuitive dominance
of the Northern Range is that affluent consumers
are densely packed in northern Europe as
is rail and road infrastructure. Southern
Europe is more sparsely populated and has
fewer transport facilities.
But
that home truth is less true than it once
was. Apart from regulatory climate change,
middle class consumers with middle class
tastes have increased in number over the
last 15 years and they crowd the cities
of Florence, Venice, Genoa and Marseille.
Despite its economic woes, Europe is becoming
more affluent and middle class. Cities like
Turin, Milan, Venice, Bern, Zurich, Vienna,
Lyon and Bordeaux, Munich are within easy
reach of southern ports especially now that
infrastructure has improved.
One
the first to mount a southern attack on
the Northern Range logic was Spain's Port
of Barcelona, which sought to draw in ships
and rail goods on to Bordeaux and ship wine
out in the year 2000. But what made this
early at attempt Quixotic was ignoring the
expense of a change from the Spanish to
French rail gauge that scuppered the plan.
Since, a Eurorail line has been laid, the
once abandoned campaign has been renewed.
A
key element to this assault actually happened
in the transpacific. After the west coast
lockout of 2002, east coast retailers began
to check out ways to avoid the troublesome
"Left Coast". Quite apart from
its recalcitrant dockers, there were a host
of eco-regulations, which had become burdensome,
not to mention the sheer distance in getting
the cargo where it wanted to go - east of
the Mississippi.
East
coast US ports, starting with Savannah,
argued that it was cheaper and better to
"keep in on the water" via Panama,
using the "ship as your warehouse"
and exchange long transcontinental journeys
for a short runs by road or rail to the
retail shelves where the cargo was destined.
What's
more, the Panama Canal was to be expanded,
then in 2014 (now 2016), which would more
than double the size of ships from 4,500
to 13,000 TEU, making the waterway a no-brainer.
This became the sales pitch to Asian shippers
by US east coast ports from New York to
Miami.
Then
something surprising occurred. It appeared
that more and more Asian cargo was going
to where it wanted to go - east of the Mississippi
- but not through Panama, but by Suez. At
first it was a trickle. It would only make
sense for cargo west of Singapore, it was
said. Of course, that meant India and Bangladesh,
whose export volumes were rising steadily
as Chinese low-end producers moved up the
value chain and surrendered the downmarket
manufacturing to Vietnam, Cambodia, Indonesia,
Bangladesh and India.
Another
factor feeding into this was the massive
increase in ship sizes. Old 4,500-TEU panamaxes
were definitely old hat while 13,000-TEUers
were becoming common. Soon 18,000-TEUers
were afloat and 20,000-TEUers were in the
order books.
Which
meant, combined with low-end work being
shifted westward, and the unit cost, or
slot costs, of container shipping given
the size of the enormous ships, fell to
the point that it had become economical
to ship to North America via Suez from the
Far East.
Of
course, these enormous vessels could not
dock in the shallows of North American harbours,
even has American bound cargo filled the
ship most of the way. Smaller panamaxes
and cascaded 9,000-TEUers could slip into
the shallows of US east coast ports, which
were madly dredging, funded by Obama Tiger
grants, bypassing environmentalists, who
held up Savannah dredging for 16 years.
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