The pandemic lockdown has suspended and reduced many commercial retail business activities and compelled retailers to reduce their expenditures. It has reduced output from factories that sell to the retail trade and reduced the volume of cargo being carried aboard container ships. There are possible strategies by which the international container ship industry might offer both frequent deliveries while maintaining competitive per container transportation costs for the North American and European retail trade.
While lockdowns related to the COVID-19 pandemic have disrupted national economies and jeopardized the viability of several business sectors, economic recovery following the end of the pandemic will likely extend over several years. At present, there is concern over a possible second wave of the disease requiring a reintroduction of the lockdown and further disrupting manufacturing related to the retail trade. The present lockdown has reduced the number of container arrivals and several ports internationally with a possible second wave of the disease further reducing international trade and the number of containers that ships carry.
The nature of container ship operation between various nations in a declining market determines the types of strategies that various sectors within the container ship industry might implement to offer customers competitive transportation rates while assuring service viability. Prior to the onset of the pandemic, single large container ships sailed at regular frequency from a single (Asian) port of origin to a single destination terminal. A reduction in sailing frequency is one strategy by which to feasibly transport fewer containers at competitive transportation rates. Further reductions in numbers of containers being carried will require alternative strategies.
A major segment of the international container transportation market involves large ships sailing from any of several large Asian ports located within several hundred miles of each other to any of several large terminals also located within comparative close proximity to each other across Western Europe and North America. While the initial reduction in international container traffic results in a comparatively minor reduction in container ship sailing frequency between major terminals, a continual reduction in international container traffic between nearby ports of origin and nearby destination ports invites adopting strategies such as multi-port operations to maintain sailing frequency.
Nearby East Coast American ports include Miami, Jacksonville, Savannah, Charleston, Norfolk (Ports of Virginia), Baltimore, Philadelphia, Newark/New York, Boston and Halifax. Some multi-port container operation already occurs on the North Atlantic between Europe and the United States, with ships calling at Port of Halifax to offload and take aboard containers on both eastbound and westbound voyages. As container volumes decline, multi-port operation could increase among more East Coast American ports involving ships that sail from Asia via the Panama Canal. A ship could partially offload containers at Port of Virginia before sailing on to Port of Baltimore.
Multi-port operation at nearby ports of origin could involve a ship being partially loaded at Qingdao before calling at Shanghai to take aboard additional containers before sailing to either Suez Canal or the Panama Canal. On the North American West Coast, multi-port operation could involve a mega-size container ship calling at Port of Vancouver for partial offloading before sailing to either Port of Tacoma or Port of Seattle for further offloading. During a period of pandemic, such operation would provide the combination of frequent arrival of containers at competitive per container transportation costs.
America’s Jones Act allows foreign flagged vessels to offload at multiple American ports without carrying domestic freight, the domain of American flagged carriers. The Act allows the same trans-Pacific mega-size container ships to partially offload containers at both Port of Oakland and Port of Long Beach as a means by which to assure the combination of frequent arrivals of containers. Should the pandemic further reduce trade volumes, there may be scope to adjust schedules to allow the same mega-ship to serve both northwestern and southwestern North American ports on the same voyage.
Along the American East Coast, three ports that include Halifax South Terminal, Newark and Charleston are capable of berthing container ships of 18,000 to 20,000 TEU, which have to sail via the Suez Canal instead of Panama Canal. Such a ship would likely sail directly to Newark for partial offloading before sailing south to Charleston and possibly on to the Louisiana International Gulf Transshipment terminal to transfer containers destined for the New Orleans area, then on to barges that sail the intra-coastal and inland waterway system.
St. Lawrence Seaway
Interlined ships sailing from Western Mediterranean transshipment terminals into the St. Lawrence Seaway could provide dual-port service by sailing to each of an American and a Canadian port located along the St. Lawrence Seaway and Great Lakes. One possibility would involve a trans-Atlantic container ship sailing to Port of Hamilton to partially offload containers before sailing to Port of Cleveland. The higher cost of railway transportation between Port of Newark and Cleveland, also between Quebec City and Hamilton justifies sailing a Seaway-max size of container ship across the North Atlantic to dual-port Great Lakes destinations.
Cross-border dual-port service offers potential cost savings by sailing a self-loading/unloading, crane-equipped Seaway-max container ship from a Mediterranean transshipment terminal to the combination of Ports of Hamilton and Cleveland. The ship would be 25 percent wider (two container widths), 45 percent longer (11 TEU) and deeper draft (1 TEU) than the usual ship that has sailed the Antwerp – Cleveland container service. Political directives likely prompted Canadian transportation authorities to protect commercial interests of the Port of Montreal, hence the absence of Canadian container ports on Lake Ontario, requiring crane-equipped ships to deliver containers to any of Ports of Hamilton, Oshawa, Johnstown or Picton.
One of the definitions of transshipment involves totally offloading a mega-size ship and transferring all containers to multiple smaller transportation vehicles heading to multiple different destinations. Transshipment can offer higher arrival frequency of large ships with competitive per-container transportation rates during a curtailment of international container trade. Transshipment terminals would transfer containers from mega-size ships to smaller vessels that have the option of multi-port sailing, carrying containers to several nearby ports and intermodal terminals. There are multiple transshipment destination ports around the Mediterranean Sea, along the North American East Coast and around the North Sea, English Channel and Irish Sea.
For Mediterranean destinations, a transshipment terminal located in the eastern Mediterranean region would provide connections to such ports as Athens, Beirut, Haifa/Tel-Aviv, Venice, Napoli, Genoa, Nice Marseilles, Mediterranean island ports along with Algiers and Tunis. The Western Mediterranean transshipment ports located near Strait of Gibraltar could connect mega-size ships that picked up containers at several Asian terminals to smaller vessels sailing to multiple European Atlantic and multiple North American Atlantic ports. A second pandemic wave further curtailing trade could result in mega-ships being assigned to sailing between Asian and Western Mediterranean transshipment ports.
More stops, bigger ships
A portion of the international container ship fleet goes out of service during a period of reduced container trade caused by a pandemic lockdown. However, the combination of transshipment and multi-port operation at regions of origin and destination allows fewer ships to sail viably at near peak load while provide higher frequency of arrival at nearby destination ports. Such operation provides customers with competitive per-container transportation rates. In North America, dual-destination port arrivals could involve nearby Canadian and American ports, such as Halifax – Newark, Vancouver – Seattle/Tacoma or Hamilton/Oshawa – Cleveland.
In Europe, a sequence of dual and triple-port arrivals at destinations should be achievable with minimal complexity and especially if ships are loaded in a sequence at Asian (transshipment) ports of origin. The American Jones Act will allow a foreign flagged vessel to offload in dual-port and triple-port arrivals, such as Jacksonville – Savannah – Charleston or Ports of Virginia – Baltimore – Philadelphia. A mega-size ship of 18,000-TEU could theoretically sail via Suez Canal to the combination of Newark, Charleston and Louisiana International Gulf Transshipment terminal and offloading containers at each port.
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