West Coast Maritime Ports

Monday's Wall Street Journal has an interesting article that includes a graphic of the volume of traffic handled by each of such - including Canada and Mexico. While rail appears in the text of such only once, the impact of the statistics directly affect three of the Class I's and indirectly the other four.

Not addressed; the impact of the 'canary in the coalmine' - PANAMAX:

http://online.wsj.com/articles/west-coa ... 1404085631" onclick="window.open(this.href);return false;

Brief passage:

• But with cargo traffic down, West Coast operators are fighting to maintain volume by underbidding each other to keep ships calling in a high-stakes game, whose score is tallied by the number of cargo containers port cranes move from ships' holds onto railcars and truck trailers. Seattle's container volume dropped to 1.6 million units last year, down 35% since 2010.
  
  Port officials say the market means shippers can dictate terms. "They're like sports teams threatening to leave if you don't build them a new stadium," said John Creighton, a Seattle port official.
  
  To stay competitive, the port has spent almost $350 million since 1999 to make its docks more efficient and road and rail connections speedier.
  
  Still, some carriers have taken their business elsewhere. In 2012, the consortium known as shipping's Grand Alliance—Germany's Hapag-Lloyd, Japan's NYK and Hong Kong's OOCL—left Seattle for Tacoma, Wash., effectively shifting 20% of Seattle's container intake to its competitor 30 miles south.
  
  The Port of Portland, Ore., cut similar deals with the South Korean carrier Hanjin Line, the latest this spring when it agreed to subsidies of $20 to $45 per container to keep Hanjin calling. That move capped a number of concessions Portland has made since 2012, which grew to $2.7 million through February, and could now rise to $4 million through the end of this year.

The Wall Street Journal continues this past Saturday with its reporting as the maritime industry - and of course those industries that support it, as in railroads and ports, readies for a post-PANAMAX shipping environment.

The article points out that there will still be a significant time advantage for Asian West Coast traffic over that routed Asia-Canal-East Coast. With the number of East Coast ports preparing a throw a big time party, I still have to question "what if nobody came?". I'm certain any of us here who read these pages favor what is best for the railroad industry. Lest we forget, even if CSX and NS see increases, but much shorter hauls, in traffic, consider what is being lost to BNSF and UP.

Now to close on a "think out of the box"; could this possible diversion of traffic from West to East be the catalyst for creation of the duopoly of transcontinental systems, i.e. BNSF+CSX, NS+UP or v.v. and KCS going to one Canadian or the other?

http://online.wsj.com/articles/port-cit ... 1404852994" onclick="window.open(this.href);return false;

Brief passage:

• The Port of Houston is sizzling, and not just because it is summer in Texas.
  
  Houston leads all but three U.S. metropolitan areas in the construction of industrial space, with more than 4.7 million square feet under way. And the rent for industrial properties rose faster there than in any other market in the year through March.
  
  Brokers credit Texas's rapidly expanding oil-and-natural-gas sector for rising demand for space at the ports. But a less-obvious factor also is responsible: the widening of the Panama Canal.
  
  When Panama in 2006 approved plans to modernize its 100-year-old canal to allow for bigger ships carrying 2.5 times as much container cargo, it threatened to break the West Coast's hold on trade with Northeast Asia.
  
  Today, more than 70% of U.S. container traffic from Asia passes through Pacific ports, and as much as a third of those containers travel through Los Angeles and Long Beach by truck and train to consumers in the eastern half of the nation.
  
  But once it is completed in early 2016, a wider canal will give shippers the option to bypass those ports and their more-expensive overland supply routes, and go directly to ports in New York, Baltimore, Norfolk, Miami and elsewhere.
  
  Because of cheaper per-unit shipping costs, as much as 25% of West-bound cargo from Asia could shift to the south and northeast, according to a report by brokerage firm JLL.

Have any of the East Coast ports thought much about the infrastructure to move the containers away from their ports? I hear a lot about dredging and about piers and cranes, but nothing much about the highways and railyards. Norfolk has done some, but not a lot. Look at Google Earth for the ports of LA and Long Beach and look at the rail infrastructure, now look at most East Coast ports. Can you imagine 5 container trains with 200 platforms departing the Port of Miami each day? With the opposition to AAF what do you think the reaction to tying up traffic in Downtown Miami would be. Also look at how the shipping companies are playing the Ports against each other, it will only be worse. A lot of ports are going to get burned.

Mr. JayBee, I have noted the absence of your byline over at this topic regarding the Port of Miami and the restored rail access to same:

http://www.railroad.net/forums/viewtopi ... 54&t=59258" onclick="window.open(this.href);return false;

I believe you will find the discussion to be informed and mature, and with a good number of participants that have "done this stuff for a living".

Nor sure if this is good news or bad news, but it is news:

https://www.wsj.com/articles/supply-cha ... _permalink

Fair Use:

The Covid-19 pandemic might not be gone, but the global supply-chain crisis it spawned has abated.

Goods are moving around the world again and reaching companies and consumers, despite some production snarls and Covid outbreaks inside China. Gone are the weekslong backlogs of cargo ships at large ports. Ocean shipping rates have plunged below prepandemic levels.

“It’s obvious that freight rates peaked and began to normalize, driven by falling demand and an easing supply-chain congestion,” said Soren Skou, chief executive of Maersk. In November, the shipping company lowered its 2023 forecast for container demand—a proxy for global trade. It now expects a decline from 2% to 4%, from a maximum decline of 1% previously.

In the U.S., retailers have ample inventory. Railroads averted a labor strike and package delivery trucks have plenty of spare capacity. That bodes well for U.S. consumers heading into 2023, executives and analysts say, although profits for transport companies will be pinched now that demand and supply are back in balance.

Finally off topic, regarding the reference to COVID, the sooner "we the people" accept that such is an endemic virus and take reasonable precautions, such as getting VAXED and masking up in areas such as airports - even if presently not required, we of normal health should be OK, and as of this past Tuesday, "Doc" said such of this 81yo.

What could the recent closing of many West Coast ports due to labor issues have on freight RR’s?

Our "two Uncles - Pete and Warren" should be pleased with the content of this Journal article that appeared in print this past Wednesday.

Fair Use:

U.S. importers are rediscovering the lure of Southern California ports.

Trade is swinging back to the ports of Los Angeles and Long Beach after a period in which pandemic-driven shipping disruptions and broader shifts in manufacturing pushed supply chains more heavily toward Gulf Coast and East Coast ports.

The Southern California ports in September, October and November recorded year-over-year increases in containerized imports of between 17% and 31%, according to ports data. At the same time imports fell at East Coast gateways such as Georgia’s Port of Savannah and the Port of New York and New Jersey.

Apparently, the days when the maritime companies were of mindset "where can we find a berth? ANY Berth" are over. Maritime ports, as well as the railroads and highway transport serving them are again competitive business enterprises. With the ever widening Gulf conflict, and the resulting need to sail around the Cape to avoid such, the East Coast ports, along with Chessie and Topper, are becoming less competitive.

With the drought affecting Central America and the need with every vessel clearing the locks resulting in a discharge of unrecoverable water into the sea, PANAMAX is being affected so far as vessels transiting.

Finally, something tells me that CPKC's desire to make their Lazaro Cardenas, Mich port competitive will be adversely affected as well.

In other news, Maersk is recommending customers choose to route through west coast ports instead of the Panama Canal while increasing the utilization of the CPKC owned Panama Railroad for certain services.

Our direct service from the US West Coast to Oceania (PANZ) is still operating weekly and can be utilized as an alternative to cargo commonly routed via the US East Coast.