The Port Community
East Coast Ports 2010: Five things to watch for

By Bill Armbruster

Here’s a look at some key areas:

Carrier services
Shippers will initially have fewer choices in 2010 than they did a year ago because carriers have dropped many services and merged others in order to cut costs. Maersk Line, for example, dropped its Trans Atlantic 3 service between North America and Northern Europe. It estimated last fall that capacity on North Atlantic routes was down 19 percent. Carriers will likely reinstate some services in the second half as volume picks up, particularly on all-water routes from Asia, but don’t look for capacity to increase by more than 3 or 4 percent. “Carriers will be reluctant to add capacity without being able to make money on the additional services or to carry more traffic at compensatory rates,” says Philip Damas, division director of Drewry Supply Chain Advisors.

All-water competition
East Coast ports will continue to grab market share from West Coast ports because of shippers’ increasing preference for cheaper all-water routes. Damas says all-water routes now handle 27 percent of Asian cargo, up from 22 percent in 2006. John Martin, president of Martin Associates, calls the competition “a brawl” and says there is little or no time difference between landbridge and all-water services, such as Hong Kong to New York. Completion of Norfolk Southern’s Heartland Corridor project by the summer will shave a day and a half off the transit time from Norfolk to Chicago.

Freight rates
Rates picked up in late 2009 along with the seasonal increase in cargo but were expected to fall back as the industry entered the slow season. According to Drewry’s Container Freight Rate Insight, the Hong Kong-New York weekly benchmark rate was $2,332 per 40-foot container, including the bunker surcharge, in November, down 28 percent from November 2008.That was up 10 percent from the summer, but it included the rise in fuel costs. Damas expects all-water rates will pick up 5 to 10 percent this year. Rates plunged last year on trans-Atlantic routes, but the Drewry analyst said he does not expect sharp reductions again this year.

Infrastructure
Ports are forging ahead with plans to increase capacity as they look to a surge in large container vessels with capacity of up to 12,000 TEUs after the Panama Canal expansion is completed in 2014. Examples include Baltimore’s 50-year contract with Ports of America to operate the Seagirt Terminal and deepen the channel to 50 feet. Others include a terminal at the Charleston Navy Base in South Carolina and a terminal at Craney Island in Virginia.

The Bayonne Bridge
The Port Authority of New York and New Jersey expects to receive the results of a $10 million study this fall on ways to solve its most pressing long-term problem the 151-foot clearance under the Bayonne Bridge. That’s not enough for ships bigger than 7,000 TEUs to pass under it and reach the port’s main container terminals. The alternatives include tearing it down and replacing it with a new bridge or tunnel, or elevating the existing bridge. The Army Corps of Engineers estimates it will cost $1.5 billion to $3.3 billion to build any of the alternatives and take 10 to 15 years to complete. Meanwhile, the port is dredging its channels to 50 feet.

In This Issue

Up Front

News, Trends & Analysis
New Items

Transport Economics: Don’t be so gloomy

Capitol Watch: From cargo screening to
roadability equipment

Trade Tools: A different world of trade in 2010

Supply Chain
Chris Steele: The corner and what’s around it

Compliance Corner: Hot trade compliance issues for 2010

Tech Trends: Five trends for 2010

Commentary
David Bennett: Five predictions for 2010

Gateway Glance
Georgia

Vietnam

The Port Community
East Coast Ports 2010: Five things to watch for

West Coast Ports 2010: The future of West Coast port productitivy?

The Shipping Environment: Five sustainable trends for 2010

Product Review: Cranes

Casualties
Triple-deck trailer barge snaps towline, tankers leak,
Coast Guard ice breaker runs aground ... and much more

Final Say
Your supply chain dynamics: 2010 crisis? Or oppotrunities?