The ultimate decision will depend on trade growing to sustain the investment and at least one major shipper, Maersk, has doesn’t see it happening soon. Maersk CEO for Latin America and the Caribbean, Robbert Jan van Trooijenbeen, was recently quoted as saying: “For me, to see any of those [mega] ships coming near Latin America, that’s the very distant future.”
Not to be outdone, a Chinese businessman is continuing to pursue an idea to build a rival $50 billion canal across Nicaragua, but so far it remains just an expensive dream according to some industry experts.
Meanwhile, the continuing congestion in the Ports of Los Angeles and Long Beach following trucking and a tentatively settled waterfront contract dispute has meant the loss of valuable business.
The malaise has encouraged some Asian shippers to use the Suez Canal rather than the West Coast Ports and rail to get to the major North American markets in the Mid-West and on the East Coast.There were nine vessels still at anchor outside the Los Angeles breakwater early in April.
“Our congestion problems have seen more of our cargo moving to the East Coast than usual and I know that the ports of Savannah and New York-New Jersey are busy,” says Marcel van Dijk, marketing manager for the Port of Los Angeles.
Rather than coming directly to the West Coast, van Dijk says some cargo owners “don’t see the love here on the West Coast anymore” and are exploring sending more of their cargo through the Panama Canal or the Suez Canal if the logistics are there.
The Port of Los Angeles isn’t taking the declining traffic sitting down and van Dijk says “we’re stepping up our play to keep our market share,” as it digs out of its congestion problems.
The troubles have brought the rival Ports of Los Angeles and Long Beach more closely together spending billions of dollars on dredging deeper shipping channels; improving on-dock rail services; and other harbour upgrades. And van Dijk says the major railways don’t want to lose business either and are beefing up their services across to the US mid-west.
At the Port of Long Beach, the Director of Business Development, Don Snyder, says work is continuing on infrastructure improvements including numerous capital projects to smooth the interface between ship and land facilities. Terminal tenants continue to invest heavily on new equipment “to make sure the interface is as good as it can be,” and there is a standing dredging committee keeping the main shipping channels open.
The two West Coast ports don’t have the vessel restrictions the Panama Canal faces, even with the expansion to double ship capacity, and Snyder says they’re already handling 14,000 TEU vessels. For Long Beach, Snyder says “we can handle the biggest ships, the sky is the limit.” Such things as water depth, crane height and utilization of backland space are optimal and “tenants are investing heavily on that for us.”