Tuesday 2 December 08 - 21:16
 

Insight & Opinion

Capacity drain

It is an interesting phenomenon of the 21st Century that the international container handling market has seen available containerport capacity dry up in so-called mature markets. It happened on the US West Coast and the UK in 2004, and arguably it is happening again now in northern Europe. 

Just recently we have seen the region’s largest container terminal operator, ECT, not accepting empty containers at its Delta Terminal and other terminal operators in the region such as APM Terminals, Rotterdam and terminals in Hamburg placing restrictions on the number of empty containers they are willing to admit into their respective facilities.

The “empty problem” is of course one that has its roots in globalisation and the resulting imbalance in most main deep-sea arterial trades. As such, it can be considered to be a specialised problem, one that perhaps demands the type of solutions that are now being progressively applied in northern Europe – off terminal storage, strictly regulated on-terminal access, appointment systems, new terminal charging structures and so on.

Even so, it seems clear that the empty problem will not go away and is one that will require more and more creative thought on overall box utilisation (perhaps increased box utilisation through  increased pool sharing), box repositioning and overall container management. The industry needs to think outside the existing framework so as to identify new solutions to what will continue to be a growing problem. The disposable “one-trip” container for instance – not seen as realistic now, but tomorrow?

It is not, however, empties on their own that have posed recent problems for northern European container terminals; it is what is generally described as a “sharp increase in container flows”. Empties are the container element high on the target list to address to better balance available capacity and demand. Pressure release

Isn’t it remarkable generally, however, that mature containerport industries such as those in The Netherlands and Germany can come under so much pressure, even allowing for factors such as the strong connectivity of the German market to emerging markets in the Baltic?

The port authorities and container terminal operators concerned are not novices in the container business – they are the “old hands”, not in any way comparable to first generation participants in the business who might be suffering demand pressures. Furthermore, they have a variety of established container market forecasting sources at their fingertips which should aid them to plan not just for “what’s round the corner”but what lies ahead in the near term at least. Admittedly, the history of container forecasting tells us that this is difficult to do with some accuracy over the longer term but within a nearer term timeframe planning can be conducted with some accuracy.

If, for example, nowadays a port is “surprised”by the introduction of larger vessels by an established client then it is definitely doing something wrong. Even Maersk Line, notorious for its secrecy regarding the introduction of new higher capacity container ships, is today disposed to offer a few clues as to future port requirements – as it did only recently to one port,which shall remain anonymous, when it recommended its new quays be built to allow for an 18m draught berthing pocket, two metres over and above the depth the port was planning on.

Undoubtedly, this sort of liaison between the container shipping and port sector is positive and has not been undertaken enough in the past.It is one route to ensuring a better balance between container capacity supply and demand. Overall, however, it is clear that this “formula” is one that has many elements to it and one that will change according to a specific location and/or set of operational factors.

There is one factor though that is pretty universal in the container handling business that may well be worth looking at as a path to avoiding capacity problems – something that came out in the UK congestion experience of 2004, namely, operators keeping a fairly tight margin between available capacity and demand so as to ensure premium pricing.

This commercial fact of life is understandable in many respects,particularly with the cost of adding new capacity spiralling in the UK in particular, but nevertheless as history records it is a strategy that can quickly become unglued when not accompanied by accurate traffic forecasting.

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