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Cargo drift from North America’s west coast ports to the east coast has continued ahead of the widened Panama Canal opening next year.
According to Drewry Maritime Research, further migration of Asian imports from west coast ports to terminals on the Atlantic and Gulf coasts can be expected in the lead up to the opening of the expanded Panama Canal, due next April.
The construction of bigger locks on the waterway will enable containerships of up to 13,000 teu to transit the canal – more than doubling the size of ships that can be deployed on Asia-US east coast services and significantly reducing unit costs for carriers.
The consultant said that headhaul flows from Asia to the west coast in the first six months of the year were half a percent down on the same period of 2014, despite the severe congestion at US west coast terminals in the early months of the year due to the ILWU/PMA labour contract dispute.
At the same time, east coast ports achieved an impressive 23.5% year-on-year growth, benefiting from the diversion of cargo due to the dispute and the establishment of a number of new ‘opportunist’ east coast services by container lines such as Israeli carrier Zim.
In July, west coast imports recorded some growth, albeit less than 1%, while the pace of growth on the east coast slowed to 14%, reported Drewry.
It added that August throughputs had actually seen a reversal of the migration trend, but Drewry attributed this to a blip in peak season traffic which demanded faster transit times, giving the main US gateway ports of Los Angeles and Long Beach “little competition”.
Import volumes at Los Angeles were ahead in August by 3.8% year-on-year, while neighbouring Long Beach posted a 22.8% increase in import cargo during the month.
Overall containerised exports from Asia to North America grew by 5.4% in the first half of the year, assisted by a continued improvement in the US economy and the strength of the US dollar which encouraged its consumers to purchase big ticket items.
Despite the longer transit times and the requirement to use smaller panamax ships for routings via the canal, Asia-North America carriers have been encouraged by the substantial premium on offer for east coast services, which according to Drewry averaged at around $1,800 per 40ft in the first seven months of the year.
However, it noted that the rate differential was eroding and by the end of September the gap had narrowed to about $1,000 per 40ft.
Drewry said that on an annualised basis west coast ports were handling 275,000 teu more Asian imports than they did three years ago, but on the opposite coast, container facilities were enjoying a 1.2m teu volume increase bonanza.
Port statistics confirm this. Savanah reported a 16.6% increase in import containers between January and August, while imports at the main east coast gateway of New York-New Jersey improved by 12.7% on a year-to-date basis as at July.
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