Tag Archives: container shipping

Cars-in-containers innovation boosts capacity

There is a shortage of ro-ro (roll on roll off) capacity for moving vehicles by sea. One possibility to move the cars is to put them into containers and ship them on container ships. But you can only get so many into a container – two per (twenty-foot equivalent unit) TEU or four in a forty-foot container.

One solution would be to find a way to pack them tighter. And that’s what DP World, the large port operator, has done for voyages from China to Turkey. They can now get three Chery vehicles in a container.

Chery Automotive is a major Chinese car manufacturer, with a portfolio of ICE, hybrid, and all-electric vehicles. In July, they imported 10,000 SUVs into Turkey from China using this method.

Turkey is a big market for Chinese cars, but it’s also a gateway to Europe. Cars brought to Turkey could be sold on into European countries.

Packing of containers has always been a way to avoid shipping ‘air’ (empty space). But one issue is the incidence of fires on ships from lithium battery explosions. These explosions have become quite frequent. It’s due to the heat and close packing. So far, ro-ro ships have suffered most, though there have been lithium battery fires on container ships, due to shipments of other battery-powered equipment. Adding large numbers of cars will make the risk greater.

A TT Club risk management director noted that automakers are simply trying to get more energy into batteries, not investing in how to reduce the danger from shipment. They need to focus more on the risk in their designs.

Here’s a picture of the stacking. It’s not very clear, but you can see the rack.

By Charlie Bartlett 03/10/2023

Cars-in-containers innovation boosts ro-ro capacity for DP World

New Panama Canal rail alternative into the US

We all know now that the Panama Canal is suffering from a lack of water, due to a prolonged drought. The result is limits on draft of ships traversing it. The Canal has also raised rates recently. So shippers are looking for alternatives.

Just remember that the canal was getting increased use as shippers migrated from US West Coast ports, and started using East Coast ports. The trip is a lot longer in time, but if there is a disruption danger at West Coast ports, it makes some sense. Over the COVID period, East Coast ports such as Savannah and the Port of Virginia have made major investments in inland infrastructure to support better distribution of goods inland. Of course Houston is also a very good port to reach from the Panama Canal and has significant container capacity.

Now we see some results from the merger of the Kansas City Southern railroad, formerly a US Class I line, and the Canadian Pacific (CP) railroad. The new line has significant capacity in Mexico which the KC developed on its own for some years. This new route will allow shippers to send cargo to Lazaro Cardenas in Mexico, a West Coast Mexico port, to Houston or north to Chicago. The route from Asia is longer in time than the US West Coast ports, but days shorter than the East Coast ports, and with excellent penetration to the Central US areas around Chicago and Kansas City.

I think this is a good marketing strategy for the CPKC railroad. Another West Coast port could well get a steady stream of container cargoes. The route would be less sensitive to West Coast US disturbances such as strikes, and less dependence on the BNSF and UP rail systems, both of which are under fire for scheduling issues, and are known to be a bit light on staff, according to recent reports from their various craft unions.

However, when there are no disturbances, the West Coast ports of Los Angeles and Long Beach are still the fast and dependable way to get cargoes into the central US. They are also good fast ways via the land bridge to get cargoes to Europe by transshipping again from the East Coast ports such as New York.

If the West Coast ports can keep on an even keel, I think their efficiency will attract back a good chunk of the trade they lost due to the strike. Trade of all kinds is down, but it’s still considerable.

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Marcus Hand | Aug 09, 2023

CPKC offering Panama Canal rail alternative via Lazaro Cardenas into the US

West Coast container ports hit by labor actions

Apparently the negotiations between the Pacific Maritime Association (PMA) and the International Longshore Workers Union (ILWU) are not going well over wages.

Some peripheral issues have been settled, but union workers want a share of the massive profits generated by the container carriers during the COVID time. PMA represents ocean carriers and terminal operators in the negotiations, and some terminals are controlled or dominated by a carrier or a group of them.

I think that is appropriate. Anyone’s analysis of the labor economics of unions will indicate that unions only have occasional times when they have any leverage over their terms of employment. This is one of them.

They should be expected to bargain hard for wage increases because they have not had a new contract since 2015. A lot of water has gone under the bridge, including massive profits for ocean liner firms. Longshoremen played a large part in the successful import and export of all those containers.

The PMA has not had a good record of conducting these negotiations, sometimes playing hardball when their sponsors would have liked a little softer approach. It’s true that the ILWU is known for its intransigence also.

But now the PMA should make a realistic offer. Inflation is high, there’s no prospect of it moderating very much very soon, and there are all those past years to make up for. Longshoremen deserve to be paid fairly for their work in the light of present, and possibly future, economic conditions.

These incidental stoppages for short times are just warnings. Neither side should want a general strike, because the new increases in West Coast shipping, after a long decline, are just emerging. It’s true some traffic has left for the East Coast, but the facts are that West Coast ports that operate well are still the fastest and most reliable way to ship to America from the Far East. If they are seen as reliable, traffic will return.

Time to step up and make an offer longshoremen are likely to accept.

Greg Miller Sunday, June 04, 2023

West Coast container ports hit as labor talks take ominous turn