Cargo Business Newswire

Tuesday, April 22, 2014

Hampton Roads struggles to handle cargo from mega shipping alliances

Hampton Roads and other ports have already have been struggling to handle cargo surges and have begun to feel the cascade effect of mega shipping alliances.

The agreements formed by the largest ocean carriers are putting massive 18,000-TEU ships into service on the major trades.

"You have this big crunch through the terminal where you're trying to force more and more containers through the system," said Paul Avery, associate editor at World Cargo News, a trade publication based in Britain. "Terminals are struggling to manage this without congestion."

Cargo backups at Hampton Roads have been cited as a factor in the Virginia Port Authority's multimillion-dollar operating losses this year.

"Virginia's not unique in the challenge that it has," Avery said.

Preparing for the larger ships the alliances are bringing "is a critical aspect of any port's job," said John Reinhart, a former Maersk Line Ltd. chief executive who took over as the Virginia authority's CEO in February and is aggressively to streamlining the port's operations.

Just a few years ago, the norm for Hampton Roads was five ships calling per week on a typical trade lane, each carrying the equivalent of 4,000 TEUs and unloading 800 of them over five days, said Tom Capozzi, the Port Authority's chief commercial officer.

Now, he said, the report may get two 9,000-unit vessels, each discharging up to 2,000 containers – over two days.

The changes are creating "this huge surge of volume that's all being condensed," Capozzi said.

"For a number of the carriers, this is a matter of survival," said Lars Jensen, CEO of SeaIntel Consulting, regarding the big carrier alliances. At a maritime conference last month Jensen, a former Maersk executive, stressed there will be significant demands on ports and terminals.

"There's going to be a lot more bottleneck effects, and there's going to be a lot more strain on a port in terms of infrastructure," he said. "Not because the number of containers they have to handle changes materially, but the concentration changes. It's going to come much more in lumps – and that's much more difficult to handle."

The Port Authority recently set up a task force to address truck congestion. It plans to launch, in May, a new appointment system for truckers arriving at Norfolk International Terminals – a variation on a system already in use at APM Terminals in Portsmouth.

"We've come up with a plan that we think will work," Capozzi said. "It's just going to take some time; it's going to take some investment."

For more of the Virginia-Pilot story: hamptonroads.com