The trans-Pacific ocean trades in 2006 turned out to be a lot livelier than many experts predicted. Estimates of container growth for cargo moving from Asia to the U.S. were in the range of 4 percent to 10 percent. Once again, however, reality appears to have trumped the forecast.
According to figures released by the Transpacific Stabilization Agreement (TSA), the first half of 2006 saw a 13.2-percent increase in the amount of eastbound container cargoes, over the same period of 2005. Carriers moved approximately 3.1 million forty-foot equivalent units (FEUs), versus 2.7 million FEUs in the prior year. And that was before the trade's peak season got under way.
More recent figures suggest that the total numbers for the year will be even higher. The Port of Los Angeles recorded increases of nearly 15 percent in June 2006, and better than 17 percent in July. August registered a whopping 21-percent rise over the same month of 2005. Total volumes moving over port docks in August reached nearly 791,000 twenty-foot equivalent units (TEUs).
Not everyone got it seriously wrong. TSA had predicted increases of between 11 percent and 14 percent, according to executive director Albert A. Pierce. "We were certainly in the ballpark," he said.
TSA also appears to have been correct about this year's overcapacity situation-or, to put it more accurately, the lack of one. Some analysts had predicted that a slew of new tonnage entering the trans-Pacific trade would result in large amounts of unused space on vessels. In actuality, 2006's peak season turned out to look pretty much like past years, with ships sailing at close to 100-percent capacity.
In fact, some shippers who weren't named Wal-Mart once again found themselves shut out of ships on which they had booked space from Asia to the U.S. This "rolling" of certain cargoes to later voyages happens to some extent nearly every year, as retailers flood the pipeline with Asia-sourced goods earmarked for the Christmas shopping season. Pierce insisted, however, that there was "very little roll activity" during the 2006 peak period. Rejections that did occur were mostly on Pacific Southwest trade lanes, he said.
Clients of ICG Commerce, a consultant on global supply chain issues, have experienced some rolling of cargoes, but "it's no worse than in past years," according to Paul Svindland, senior director of the firm's Global Logistics Solutions Group.
Vessel Size Growing
Predictions of overcapacity for this year were tied to the trend of ever-larger containerships in the trade. Vessels able to carry between 8,000 and 10,000 TEUs are becoming increasingly common on major trade lanes. In August, Maersk Line launched the Emma Maersk, the largest containership ever built, with capacity of between 11,000 and 14,500 TEUs, depending on the ratio of loaded to empty containers. (Maersk itself favors the lower figure.) Few ports in the world have the water depth, terminal facilities and intermodal connections to handle a vessel of that size. Analysts worried that West Coast ports would experience gridlock with the advent of the newest mega-ships.
As it happened, most of the new tonnage slated for trans-Pacific deployment wasn't due until the second half of this year. "They're just hitting the marketplace now," Svindland said in early October. "Going into the fourth quarter is where people expected to see vessel utilization drop off."
|"The infrastructure of the world we live in will always be behind. I don't envision people asking ports to adopt a 'build-it-and-they-will-come' approach. We're always going to see this reactive mentality."|
- Paul Svindland of ICG Commerce
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