An Asian dilemma
The new 18,000 teu capacity Triple-E vessels will add to congestion even in the big Asian ports
Travelling around Asia opens the mind as there are events taking place here that introduce new issues, and these suggest we may not always have been looking in the right direction.
With Maersk ordering a second batch of 18,000 teu ships and CMA CGM stretching some of its newbuildings to 16,000 teu, our focus was the European ports. Could they handle ships of this size? We assumed operations in Asia would not be a problem.
However, it seems that assumption is jumping the gun. It seems that the two large Chinese ports of Hong Kong and Shanghai are suffering from congestion due to a number of reasons. Firstly, the big ships are occupying more berth space and taking longer to work. This effectively reduces berth productivity forcing ships to wait for an empty berth. Secondly, the growth of cargo volumes from western China is increasingly shifting to barges causing further pressure on the berth and internal box movements.
As the very large container ships have effectively been built for the China trade, this pressure on the terminals in China will continue and will likely worsen.
There are similar issues in Malaysia at Port Klang and Tanjung Pelepas where some services are shifting back to Singapore, to the delight of PSA.
In Vietnam, with its virtual surplus of container facilities, we are also seeing a shift to those terminals closer to the sea lanes and not up the river nearer to Ho Chi Minh City, despite the poorer road infrastructure.
Cargo volumes out of China continue to remain relatively robust, but as we look at the other Asian ports we see much lower growth rates, closer to 5%, particularly in the Southeast Asia region and in the intra-Asia trades. As the Western Hemisphere continues to slow down, this growth may fall even further.
The big ships are therefore not getting any advantage of cargo growth in the Singapore region, yet the terminals must struggle with the negative aspects of the ships while the Chinese ports need the larger vessels but are struggling to handle them.
A difficult situation that will require new strategies by all the terminal operators - certainly things will change under the pressure.
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