Drewry: Cargo Shift to US East Coast in Steady Evolution
- Business & Finance
Poor container shipping freight levels and the countdown to the reformation of alliances in March of 2017 have pre-empted any mass invasion of new capacity in the Asia-East Coast North America (ECNA) trade, thus further drift of cargo from a West Coast routing to an East Coast carriage will be gradual, according to shipping consultancy Drewry.
After the widened Panama Canal commenced operation, the new set of locks saw the first Neopanamax vessel, the 10,000 TEU MOL Benefactor, perform a commercial transit through the canal en route for a berth slot at an East Coast port of New York.
Assigned to the G6’s newly formed NYX service, the vessel, which reportedly paid a toll fee of some USD 830,000, became the largest containership that the port of New York handled in its history.
During the course of the third quarter, the G6 and CKYHE alliances will have added 30 Neopanamax vessels to the Asia-US East Coast trade routing via Panama.
“Without doubt, the ability of the canal to handle much larger ships is a groundbreaking event and heralds a new era in which a large swathe of US importers will have a much wider choice of options routing goods from the Far East,” Drewry said.
However, according to Drewry, it will not all change overnight as the migration of seaborne cargo from the West Coast to the East Coast will continue to be a steady evolution.
Cargo liftings during the first few months of 2016 have been heavily skewed by events which took place in the US West Coast ports in early 2015, following the breakdown of talks between management and unions to agree a new labour contract.
After having risen year-on-year by 1.7% in the first quarter of 2016, Asian exports to ECNA subsequently witnessed two lean months, shrinking by 3.9% in April and by 1.1% in May.
The American market has become a difficult one to predict, Drewry said, and, while demand for East Coast space improved from mid-May onwards, it is impossible to say with any conviction whether this year’s peak season is going to be a strong one or not.