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            may 21, 2018

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New shipping alliances causing delays at USWC ports


Tacoma has become the first US west coast port in the country to grapple with the changes wrought by new container shipping alliances.
The vessel rotations introduced last month by new shipping alliances have generated terminal congestion, longer truck turn times, delays in spotting and releasing intermodal trains at on-dock rail facilities as well as chassis dislocations.
However, beneficial cargo owners (BCOs) say they have so far not experienced disruptions in vessel schedules or in taking delivery of their shipments at west coast ports, according to IHS Media.
But, due to events unfolding in Asia, they are preparing for possible delays in the coming weeks.
Indeed, several carriers reportedly notified their customers that in addition to congestion problems at Shanghai's Yangshan Port, congestion is spreading to Qingdao and Ningbo.
Poor weather, including dense fog in Shanghai in mid-April, problems Asian ports are experiencing in adjusting to new vessel rotations from the restructured alliances, and a move by exporters to get ahead of previously-announced rate increases May 1 in the Asia-Europe trades have reportedly overwhelmed some ports.
BCOs are also on alert for possible delays or dislocations at east coast ports in the coming weeks.
West coast terminals say problems in the past week or so should be corrected in coming weeks ports adjust to the rotations, increased container volumes from the bigger ships carriers have deployed.
"We have been through this rodeo before," said LA Port marketing official Michael DiBernardo, explaining that major changes in ocean services cause temporary disruptions.
Some experienced marginal increases in vessel sizes or the loss of a string. Some lost a string but made up for it by handling bigger ships with more cargo.
At SSA's Oakland International Container Terminal, for example, gate moves during the day increased to about 5,000, from 4,500, and to 1,700 at night from 1,200 before.
SSA's Terminal 18 in Seattle actually got a large bump in volume as it doubled its gate moves to about 2,500. SSA operates three terminals in Long Beach, but any loss of a vessel service was offset by more cargo from bigger ships.
Port of Oakland spokesman Michael Zampa said the Everport terminal also experienced an increase in cargo volume due to alliance changes, but generally truck turn times in the harbour are normal.
The same is true in Southern California, where truck turn times in April were faster than they were earlier in the year, according to the Harbour Trucking Association, which tracks turn times at all of the port's 13 container terminals.
The Northwest Seaport Alliance of Seattle and Tacoma are experiencing extra work as they reposition containers from facilities where the former alliance vessels had called while at the same time taking on containers from the new alliance rotations, said spokeswoman Tara Mattina.
The biggest impact of the new alliances is unfolding in Los Angeles-Long Beach. In addition to terminal-hopping and vessel upgrades, the port complex is adjusting to repercussions of the alliances changes on rail operations and chassis availability. Also, a massive bridge replacement project is disrupting truck traffic on Terminal Island.
Pier T, the former Hanjin Shipping terminal in Long Beach, was hit hard with volume dropping to 12,000 container moves a week with the bankruptcy.
But in late April jumped to more than 20,000 container moves a week when a 2M service by Maersk Line MSC moved to the Pier T facility from Los Angeles.
BNSF Railway and Union Pacific Railroad have also been affected by the alliance shifts because intermodal contracts they have with individual shipping lines require the railroads to follow the carriers to the new terminals where their vessels are now calling.
Alan McCorkle, vice president of Yusen Terminals in Los Angeles, said the spotting of trains and therefore departure of the trains are being delayed. "It's not the volume, but the timing," he said.
There is still some concern on both coasts, however, that things could get worse before they get better due to strong export volumes in Asia and logistics developments that could impact vessel departures.
According to Drewry's latest Container Intelligence Weekly, China's top 10 ports collectively experienced a 6 per cent increase in container volume in the first quarter of the year. Drewry stated the ports with the largest gains - Qingdao, Shanghai and Ningbo - are experiencing the worst congestion.

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