Who Is Turning US West Coast Strife into Profit?
Carriers experienced varying levels of disruption from the US West Coast port labour dispute, but despite the near universal misery there was surprisingly at least one ‘winner,’ according to Drewry.
Drewry examined data from the Marine Exchange of Southern California and found that the number of container ships anchored has been rising steadily since the start of the year, with 23 waiting for a berthing window at the end of February.
While the data paints a worsening picture, Drewry says it does not tell the whole story, specifically the relative disruption experienced by individual carriers.
To analyse the impact of the dispute on individual carriers, Drewry focussed on the fourth quarter 2014 to establish a rough industry-wide assessment of the congestion costs using the statement from NOL-APL that SoCal port congestion added USD 15 million to the company’s liner division Core EBIT loss in the last three months of 2014.
The research revealed that APL was actually one of the least affected by vessel anchorage and long delays, while OOCL, CSCL, NYK and Hanjin took more than their fair share of the pain, Drewry said. It is possible that those carriers with fewer ships anchored achieved this by slowing down the vessels on the approach to LA/LB.
The research also pointed out that nine of the ten carriers (Horizon Lines being the exception) with the fastest implied 4Q turnaround time had some form of interest in a terminal within the LA/LB complex. That said, so did the slowest six carriers so it seems that there is no guaranteed way to protect port operations.
Drewry also noted that old-fashioned customer relations played a more significant role to faster turnaround times than terminal shareholding, with the biggest users of LA/LB – APL, MSC and Cosco – having three of the four quickest implied turnaround times.
The interloper among that international crowd, Matson, could be described as the one winner to emerge from the USWC disruption, according to the research. Drewry has heard anecdotal reports the US carrier was able to charge a considerable freight rate premium for its express service from Shanghai as its operations were largely unaffected.
It may well be that Matson has struck the winning formula for these exceptional circumstances –being constant and predictable to make life easier for terminals, says Drewry. By operating a reliable and independent service they are untroubled by the demands or operational weaknesses of service partners.
In addition, Matson’s ship sizes have remained the same (averaging 2,800 TEUs) whereas its bigger competitors have dramatically upgraded; causing peaks the terminals have struggled to cope with. But that is not to say operating small, expensive ships is a winning formula for the long-term, Drewry points out.
Source: Drewry; Image: Port of Long Beach