SlideShare a Scribd company logo
1 of 42
Download to read offline
XIX Latin American Congress of Ports
        July 7-9, 2010 • Manta, ECUADOR


The Possible Effects of the Panama Canal Expansion
       on Ports in the Western Hemisphere

               By Larry Lam
               Chairman
               Portek International Ltd




                                                     1
2
What we do
Portek is both

 •   a provider of equipment, services and solutions to ports
     worldwide, &

 •   an operator of ports in emerging countries.

 •    unique combination of skill sets, full spectrum of
     equipment engineering and port operating expertise




                                                                3
As a provider to ports, we undertake”

      Modernization and Modification of Container Cranes — upgrading Cranes from
      PX to PPX dimensions, reliability, safety and performance improvement

      Sale and Lease of Port Equipment on quick deployment basis

      Mobilisation and Relocation of Cranes

      Maintenance contracts

      Crane accidents & emergencies recovery & repairs

      Consultancy in Traffic studies, port marketing program to attract traffic, port
      planning and simulations

      Port IT & Automation modules




                                                                                        4
Port Equipment Engineering




                             5
Port IT & Automation




                       6
As a port operator, we operate 7 terminals:


     Bejaia Mediterranean Terminal (Algeria)

     Valetta Gateway Terminal (Malta)

     Port Owendou in Libreville & Port Gentil ( Gabon)

     Terminals T9 and T300 in Jakarta, Indonesia

     Banten Port, West Java, Indonesia




                                                         7
Portek Port Operation




                        8
How will Panama Canal expansion affect ports in the
              Western Hemisphere ?


   In this presentation, we will look at:

      Trade routes — Pre and Post Canal Expansion

      Cascade Effect & Canal Expansion on Size of Container Ships deployed

      Impacts on ports, winners and losers

      Bulk trades




                                                                             9
Western Hemisphere refers basically to the Americas:

  North America,
  Central America & the Carribean
  South America.




                                                       10
Canal Expansion affects all shipping


   Container shipping — presently 30% of Panama traffic

   Bulk shipping

   Liquid

   Cruise, general cargo, Project cargo and Others.




                                                          11
Trade routes generally fall into 2 categories:

East — West trade routes:

    Far East — US West Coast (USWC) — Transpacific

    Far East — US East Coast (USEC) via Panama

    Far East — US East Coast via Suez

    Far East — S America West Coast (WCSA)

    Far East — S America East Coast. (ECSA) via Cape

    Europe — USEC (Transatlantic)

North South trade routes:

    Europe — S America

    North America — Central and S America

    Intra-Latin America


                                                       12
Cascade Effect

  Cascade Effect:

      Large ships displacing small ships in all trade routes due to emergence and
      large scale deployment of large post panamax ships

  For Cascade effect to take place, we must have:

    increased volume, hence justifying larger ships or
    same volume, but reduced sailing requencies,
    or both of above happening

  To analyse the full impact on ports, we will therefore consider Combined action of:
      Canal expansion + Cascade Effect.




                                                                                        13
Cascade Effect




By end of 2007, there were 188 Vessels of greater than 10,000 Teus on order, though some
may have been postponed or cancelled.

By 2011, Post Panamax Vessels will contribute about 45% of all container slots, after adjusting
for some order cancellations



                                                                                                  14
LPPX/ SPPX
             6,500+ –
             12,500TEUs
Displacing

             LPX/ PPX
             4,000 – 6,500TEUs

Displacing


             MPX
             2,000 – 4,000TEUs
Displacing

             SPX/Feeders
             800 – 2,000TEUs


                                 15
Trade Route: Asia — US West Coast (Transpacific)

          CMA-CGM: South China / USWC Vessels >8000 teus




     Source CMA-CGM

• Presently, high volume shuttle services using Large PPX vessels 8,000 to 10,000 TEUs
• Pacific SW = LA + Long Beach + Oakland > 16m TEUs in 2008
• Pacific NW = Vancouver, Prince Rupert, Seattle, Tacoma > 6.3 m TEUs




                                                                                         16
Effects on USWC Ports
Post Canal Expansion 2014 — effects on USWC ports:
   Vancouver, P Rupert, Seattle, Tacoma, Portland, San Franscisco, LA /Long
   Beach

   Continue as gateway ports, handling own traffic; based on shuttle service from
   Asia

   Transshipment traffic unlikely, due to location, capacity and productivity.

   Will lose significant intermodal traffic to all water Panama route. US$2,000 to
   rail a container from USWC to USEC. Presently only 30% of Asian cargo go
   through USEC ports by all water route (via Panama or Suez)

   However, both railroads and ports are preparing to fight back to retain traffic.




                                                                                      17
Trade Route: Asia —West Coast South America (WCSA)




Presently, Asia-WCSA :
   Mainly direct long haul from Asia, using Panamax vessels
   Multi port calls. Long transit time 84 days
   Mostly Panamax vessels, though MSC now using 6,000 teu ship.
  Beside direct calls, there are also transshipment services via Balboa


                                                                          18
Trade Route: Asia — West Coast South America (WCSA)
 Post Canal Expansion

   Direct long haul multi port service may decrease in favour of transshipment via Balboa

   Transshipment to WCSA ports may come in two forms:

     •   Piggy back on USEC traffic, on 8,000 to 10,000 TEU ships and transshipped via
         Balboa on feeders
     •   Shuttle services from Far East to Lazaro Cadenas and Balboa, plus one other port,
         then transshipped via these to WCSA ports

   More capacity being created at Balboa - PPC & PSA Panama. A natural transshipment
   hub for Central America /WCSA traffic.

   Panama -The Singapore of Western Hemisphere.




                                                                                             19
Effects on WCSA ports

 Balboa will be clear winner, transshipment hub for Central America and WCSA

 Manzanillo (Mexico), Lazaro Cadenas — Transshipment for Central America

 Will a transshipment hub emerge in WCSA?

 Present Load distribution still not in favour. Chilean ports presently contributes 3.0 m out
 of 5.8 m TEUs of WCSA total traffic.

 But Peruvian traffic fastest growing. Can Callao be a sub-regional transshipment hub?
 Feedering to Guayaquil, Paita, Arica, Iqueque, Antofagasta.

 Manta has ambitions: good depth and location, but lack of hinterland cargo is a
 disadvantage. It could be complimentary to Balboa, as a spill over port




                                                                                                20
Case for Manta Port ?




 Source: Maersk Shipping


  Presently, Maersk’s Asia—Central America AC2 & AC3 services show
dedicated shuttle service has sufficient volume

  Manta is one day sailing from Balboa, hence possible for shipping lines to
extend one more port call to Manta within the shuttle service.

  Provided capacity is available, productivity is good.



                                                                               21
Trade Route: Asia — US East Coast (USEC) - Panama




          Source APL Trans-Pacific-443
Presently, this trade is characterized by

   Panamax ships less than 5100 teu, transiting through Panama Canal
   Only about 30% of Asian imports are shipped through USEC ports
   Transit time about 21 days.
   16 weekly services of average capacity of4,000 teu

                                                                       22
Trade Route: Asia — US East Coast (USEC)
Post Canal expansion,

   Quantum jump in ship size - Post Panamax ships of probably up to 10,000 teu

   Intermodal traffic through USWC will substantially migrate to all water USEC.

   Cost savings per slot of 30% to 40% between 10,000 and 4,000 TEU ships

   Bayonne Bridge in New York —New Jersey limit ship size to about 7,000 TEUs

   New York-New Jersey represent 1/3 of USEC port throughput (15.5 m TEUs).

   Deployment of >10,000 TEU ships to USEC not justified due to insufficient load, if they
   cannot call New York/New Jersey.

   Bridge of the Americas in Panama can also be a limitation for vessels > 14,000 teus.



                                                                                             23
Impact on USEC Ports

  New York/New Jersey mayl miss the boat, limited to 7,000 TEUs.

  However, studies have been done to raise from 151 ft to 215 ft. Senate recently
  approved bridge heightening. Also PONYJ is builidng new terminal at Bayonne

  In Panama, Bridge of the Americas has an air draft of 201 ft

  Savannah, Virginia, Charleston will gain market share, expand their hinterlands, become
  gateways for intermodal traffic. More likely 8,000 to 10,000 teu ships.

  However, most other ports will also need upgrade for greater ship sizes due combined
  Canal Expansion & Cascade Effect




                                                                                            24
Trade Route: Asia — USEC via Suez




                                    25
Trade Route: Asia — USEC via Suez

Presently,

  5 weekly services with vessels ranging from 5,000 teu to 8,500 teu

  These arise exactly because of constraints at Panama Canal.

  Transit time 31 days from Yantian to New York — long

  More suited for SE Asia / Indian Continent cargo

Post Canal expansion

  Will see reduced services, only catering to Indian sub-continent

  Panama Canal route transit 21 days — 10 days shorter than Suez routes.




                                                                           26
Trade Route: Asia — East Coast South America (ECSA) via
                  Cape of Good Hope




    Source CSAV


                                                      27
Trade Route: Asia — East Coast South America (ECSA)
Presently

   Direct long haul from Far East —ECSA via Cape of Good Hope.
   Mainly Panamax ships
   Multiport calls covering Bueno Aires, Montevideo, and all major Brazilian
   ports

Post Canal expansion,

   Ship size will continue to increase due to increased load and Cascade
   factor.
   Multiport calls, with Santos as the dominant port
   Some cargo may shift to piggyback on Asia-USEC trade, and transship
   via Coco Solo, Panama to Brazilian ports.

                                                                               28
Impact on ECSA ports of Brazil, Uruguay and Argentina


    Direct, Multiport services from Asia and Europe still dominant

    Some minor impact from Canal expansion

    Brazilian ports are high cost (USD 300 vs USD 100), lack of capacity

    Santos an obvious load centre, substantial investments being made, however,
    need to look at port tariffs.

    Argentina (La Plata), Uruguay (Montivideo) expanding port capacity.

    All major ports will see higher volume, larger ships, due to GDP expansion




                                                                                  29
Trade routes: Carribean / Central American /Gulf




   Source CMA-CGM



      Region is served by direct multiport calls from Europe, as well as
      Asia




                                                                           30
Trade routes: Carribean / Central American /Gulf




Source CSAV

   Also by feedering from Carribean hubs such as Kingston, Caucedo



                                                                     31
Trade routes: Carribean / Central American /Gulf

Presently,

   This region is served by direct service from Asia, and Europe & also
   piggybacking on the Asia- USEC services via transshipment.

   Transshipment hubs: Kingston, Caucedo, Bahamas, Colon & Manzanillo in
   Panama, Cartagena

   Most of Carribean / Central American / Gulf ports are feeder ports.

Post Canal Expansion

   Same trade pattern but with larger vessels and trending towards higher
   proportion of transshipment, and reduced direct service


                                                                            32
Impact on Carribean / Central American /US Gulf ports

 Post Canal expansion:

    Major ports will see dramtic increase in ship sizes 5,000 to 10,000 teus

    Balboa will be clear winner on Pacific side

    Coco Solo (MIT & CCT), Cristobal (PPC) winners on Atlantic side

    Kingston, Caucedo, Cartagena will also benefit

    US Gulf Ports may lose some direct calls due to location, low load level, and become
    more of feeder ports.

    Cascade effects will put pressure on all ports to receive larger ships.

    Some ports need to reform labour practices, customs procedures. Central American
    state run ports.




                                                                                           33
Trade Route: Europe — USEC (Transatlantic)

North Europe - US East Coast




Transatlantic trade will not be much affected by Canal Expansion.
Cascade effect will push ship sizes.




                                                                    34
North- South Trade: Europe — South America




Source CSAV



                                                 35
North- South Trade + others:


 Europe — Latin America trade will be predominantly influenced by

     Far lower volume, hence Panamax vessel sufficient.

     Cascade effect — migrating to bigger vessels in step with growing volume.

 Similarly for N America — S America trade.

 Intra —Latin American trade in terms of bulk commodities and re-distribution of cargo from
      Logistic and distribution centres established in Panama and elsewhere.

 North - South trade does not have same Impact on Ports as East-West Trade.




                                                                                              36
Factors influencing types and size of ships
calling at ports

    Navigational factors — water draft, air draft, Canal restrictions.

    Load or Volume of cargo - Pull factor

    Cascade Effect — Push factor

    Port factors — turn-around time: productivity, capacity, equipment, labour
    practices

    Other factors like security, piracy, legislation such as Jones Act, Cabotage
    laws




                                                                                   37
Concentration Effect

Deployment of large SPPX ship leads to concentration effects:

    Cargo will be concentrated in fewer ships, larger ships

    Cargo will be concentrated in a few hub ports, and transshipped to final destinations

    Slot sharing or joint service

    Sailing frequency may reduce — recent example of slow steaming as a response to high
    fuel costs and excess capacity at expense of shippers.




                                                                                            38
Effect of Canal Expansion on Bulk cargo trade
 Presently 85,000 dwt bulk Panamax bulkers
 transit Canal

 Post expansion will see Cape sized vessel of
 120,000 dwt, upto 175,000 dwt. Draft increase
 from 39.5 ft (12m) to 50 ft (15m)

 Lower freight from better utlisation of Panamax
 vessels or from use of larger vessels

 Will see increase of following trades:
      Grain flow from US Gulf, to Asia and WCSA
      Metallurgical coal from USEC to Asia
      Iron ore from northern Brazil, thermal coal
   from Colombia to Asia
      Minerals from Chile and Peru to USEC and
   Europe will get a boost.


                                                    39
General Comments / Questions:

   For Latin America, strong economic growth, commodity cycle, and increased world
   trade will drive container traffic and port business. A replay of South East Asia in the
   90’s.

   Canal expansion is only a facilitator, not a cause. Extent of Canal impact will largely
   depend on the Canal tariff. Alternatives are already available. Shipping lines are flexible,
   and able to re-route to avoid high costs.


   Increased trade volume, ship size, and canal expansion favour
   transshipment. However, not a winners take all case. Numerous minor transshipment
   ports will co-exists with the major hubs to take the spill over, and provide non available
   berthing windows at the major hubs.

   Port Authorities need to take a business like view of port development. New
   transshipment centres requires huge investment outlay and competitive pricing. Not
   every one’s game in today’s deleveraging world.




                                                                                                  40
General Comments / Questions:


   Is there a lack of coastal shipping choices to stimulate feeder shipping?

   New impetus for Policy makers to overhaul Cabotage laws to promote freer and
   competitive short seas shipping, to reduce distortions to economies. Example: it costs
   more to ship a container from San Antonio to Iquique than San Antonio to Callao

   Development of feeder port vital for economy and industries of the particular province.
   Example: In Mexico, Mazatlan and Guayamas not well served by feeder shipping.

   Cabotage trade now mainly done by trucking. Long coast lines of S America favour
   seaborne traffic versus land transport. To be encouraged as a greener alternative.




                                                                                             41
Thank you



            42

More Related Content

What's hot

Team 8_2M(Final)
Team 8_2M(Final)Team 8_2M(Final)
Team 8_2M(Final)
Jenny Hoang
 
Shipping industry planning, optimization & scheduling
Shipping industry planning, optimization & schedulingShipping industry planning, optimization & scheduling
Shipping industry planning, optimization & scheduling
Puneet Mishra
 
Transnet port terminals on stay ahead of the competition, presented during af...
Transnet port terminals on stay ahead of the competition, presented during af...Transnet port terminals on stay ahead of the competition, presented during af...
Transnet port terminals on stay ahead of the competition, presented during af...
Transnet Port Terminals
 
Transnet who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
Transnet  who we are- by Transnet Port Terminals Chief Executive, Karl SocikwaTransnet  who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
Transnet who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
Transnet Port Terminals
 
South africa’s ports system & position, enables it to access to south south t...
South africa’s ports system & position, enables it to access to south south t...South africa’s ports system & position, enables it to access to south south t...
South africa’s ports system & position, enables it to access to south south t...
Transnet Port Terminals
 
Transnet and TPT overview 12 Sept 2016
Transnet and TPT overview 12 Sept 2016Transnet and TPT overview 12 Sept 2016
Transnet and TPT overview 12 Sept 2016
Willie Coetsee
 

What's hot (20)

Team 8_2M(Final)
Team 8_2M(Final)Team 8_2M(Final)
Team 8_2M(Final)
 
2016 STS - Parto Mazdeyasni: Partnering with Ports
2016 STS - Parto Mazdeyasni: Partnering with Ports 2016 STS - Parto Mazdeyasni: Partnering with Ports
2016 STS - Parto Mazdeyasni: Partnering with Ports
 
TRANSPORTATION MANAGEMENT
TRANSPORTATION MANAGEMENTTRANSPORTATION MANAGEMENT
TRANSPORTATION MANAGEMENT
 
An introduction to the maritime economics 2017
An introduction to the maritime economics 2017An introduction to the maritime economics 2017
An introduction to the maritime economics 2017
 
Shipping industry planning, optimization & scheduling
Shipping industry planning, optimization & schedulingShipping industry planning, optimization & scheduling
Shipping industry planning, optimization & scheduling
 
Impact of the New Suez Canal on North America
Impact of the New Suez Canal on North AmericaImpact of the New Suez Canal on North America
Impact of the New Suez Canal on North America
 
Transnet port terminals on stay ahead of the competition, presented during af...
Transnet port terminals on stay ahead of the competition, presented during af...Transnet port terminals on stay ahead of the competition, presented during af...
Transnet port terminals on stay ahead of the competition, presented during af...
 
Overview of transnet port terminals
Overview of transnet port terminalsOverview of transnet port terminals
Overview of transnet port terminals
 
Transportation of fruits and vegetables
 Transportation of fruits and vegetables   Transportation of fruits and vegetables
Transportation of fruits and vegetables
 
The Decision to Pursue a 47 foot Channel Depth at Jacksonville's Harbor (JAXP...
The Decision to Pursue a 47 foot Channel Depth at Jacksonville's Harbor (JAXP...The Decision to Pursue a 47 foot Channel Depth at Jacksonville's Harbor (JAXP...
The Decision to Pursue a 47 foot Channel Depth at Jacksonville's Harbor (JAXP...
 
Ch09 the transportation_system
Ch09 the transportation_systemCh09 the transportation_system
Ch09 the transportation_system
 
Transnet who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
Transnet  who we are- by Transnet Port Terminals Chief Executive, Karl SocikwaTransnet  who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
Transnet who we are- by Transnet Port Terminals Chief Executive, Karl Socikwa
 
Transportation strategy
Transportation strategyTransportation strategy
Transportation strategy
 
MHF Services Corporate Presentation
MHF Services Corporate PresentationMHF Services Corporate Presentation
MHF Services Corporate Presentation
 
Measuring and evaluating port performance and productivity
Measuring and evaluating port performance and productivityMeasuring and evaluating port performance and productivity
Measuring and evaluating port performance and productivity
 
South africa’s ports system & position, enables it to access to south south t...
South africa’s ports system & position, enables it to access to south south t...South africa’s ports system & position, enables it to access to south south t...
South africa’s ports system & position, enables it to access to south south t...
 
Transnet and TPT overview 12 Sept 2016
Transnet and TPT overview 12 Sept 2016Transnet and TPT overview 12 Sept 2016
Transnet and TPT overview 12 Sept 2016
 
Port Development, Review of Maritime Transport 2014
Port Development, Review of Maritime Transport 2014Port Development, Review of Maritime Transport 2014
Port Development, Review of Maritime Transport 2014
 
Terminal operation hub Ngqura and spoke model
Terminal  operation hub  Ngqura and spoke modelTerminal  operation hub  Ngqura and spoke model
Terminal operation hub Ngqura and spoke model
 
Port arrastre, logistics and traffic management
Port arrastre, logistics and traffic managementPort arrastre, logistics and traffic management
Port arrastre, logistics and traffic management
 

Similar to The Possible Effects of the Panama Canal Expansion on Ports in the Western Hemisphere

panamacanalfinalp245е13pt-160219132314.pptx
panamacanalfinalp245е13pt-160219132314.pptxpanamacanalfinalp245е13pt-160219132314.pptx
panamacanalfinalp245е13pt-160219132314.pptx
TasiaRiazanowa
 
Panama Canal-Project Managment
Panama Canal-Project ManagmentPanama Canal-Project Managment
Panama Canal-Project Managment
Rohan Rathore
 
Port of Baltimore - Business Services Presentation 06.08.15
Port of Baltimore - Business Services Presentation 06.08.15Port of Baltimore - Business Services Presentation 06.08.15
Port of Baltimore - Business Services Presentation 06.08.15
Susquehanna Workforce Network
 
BCG_Panama_Canal_WP
BCG_Panama_Canal_WPBCG_Panama_Canal_WP
BCG_Panama_Canal_WP
Brian Tonn
 

Similar to The Possible Effects of the Panama Canal Expansion on Ports in the Western Hemisphere (20)

Panama Canal Expansion & its Huge Significance for US Trade, Ports, Railways,...
Panama Canal Expansion & its Huge Significance for US Trade, Ports, Railways,...Panama Canal Expansion & its Huge Significance for US Trade, Ports, Railways,...
Panama Canal Expansion & its Huge Significance for US Trade, Ports, Railways,...
 
Panama Canal Finally Opens & Ocean Freight Rates May Plummet?
Panama Canal Finally Opens & Ocean Freight Rates May Plummet? Panama Canal Finally Opens & Ocean Freight Rates May Plummet?
Panama Canal Finally Opens & Ocean Freight Rates May Plummet?
 
Panama canal
Panama canalPanama canal
Panama canal
 
Panama canal final ppt
Panama canal final pptPanama canal final ppt
Panama canal final ppt
 
panamacanalfinalp245е13pt-160219132314.pptx
panamacanalfinalp245е13pt-160219132314.pptxpanamacanalfinalp245е13pt-160219132314.pptx
panamacanalfinalp245е13pt-160219132314.pptx
 
Arctic route
Arctic routeArctic route
Arctic route
 
U.S. PORT UPDATES FOR PANAMA CANAL EXPANSION
U.S. PORT UPDATES FOR PANAMA CANAL EXPANSIONU.S. PORT UPDATES FOR PANAMA CANAL EXPANSION
U.S. PORT UPDATES FOR PANAMA CANAL EXPANSION
 
Futuristic Infrastructure Project - The Great Panama Canal 2014
Futuristic Infrastructure Project - The Great Panama Canal 2014Futuristic Infrastructure Project - The Great Panama Canal 2014
Futuristic Infrastructure Project - The Great Panama Canal 2014
 
Panama Canal Expansion Project
Panama Canal Expansion ProjectPanama Canal Expansion Project
Panama Canal Expansion Project
 
Panama canal expansion
Panama canal expansionPanama canal expansion
Panama canal expansion
 
Seattle Port White Paper
Seattle Port White PaperSeattle Port White Paper
Seattle Port White Paper
 
Container Shipping in Canada
Container Shipping in CanadaContainer Shipping in Canada
Container Shipping in Canada
 
The panama canal(2)
The panama canal(2)The panama canal(2)
The panama canal(2)
 
Panamax
PanamaxPanamax
Panamax
 
Dregging Los Goles at Guayaquil Gulf
Dregging Los Goles at Guayaquil Gulf Dregging Los Goles at Guayaquil Gulf
Dregging Los Goles at Guayaquil Gulf
 
Panama Canal-Project Managment
Panama Canal-Project ManagmentPanama Canal-Project Managment
Panama Canal-Project Managment
 
Expansion Of The Panama Canal
Expansion Of The Panama CanalExpansion Of The Panama Canal
Expansion Of The Panama Canal
 
Port of Baltimore - Business Services Presentation 06.08.15
Port of Baltimore - Business Services Presentation 06.08.15Port of Baltimore - Business Services Presentation 06.08.15
Port of Baltimore - Business Services Presentation 06.08.15
 
BCG_Panama_Canal_WP
BCG_Panama_Canal_WPBCG_Panama_Canal_WP
BCG_Panama_Canal_WP
 
Panama's Canal
Panama's CanalPanama's Canal
Panama's Canal
 

More from Portek International Pte Ltd

Cascade Effects in Container Shipping -Implication for Regional and Feeder Ports
Cascade Effects in Container Shipping -Implication for Regional and Feeder PortsCascade Effects in Container Shipping -Implication for Regional and Feeder Ports
Cascade Effects in Container Shipping -Implication for Regional and Feeder Ports
Portek International Pte Ltd
 

More from Portek International Pte Ltd (6)

Finite element method in crane structural failure analysis & rectification (T...
Finite element method in crane structural failure analysis & rectification (T...Finite element method in crane structural failure analysis & rectification (T...
Finite element method in crane structural failure analysis & rectification (T...
 
What to do with your Panamax Cranes?
What to do with your Panamax Cranes?What to do with your Panamax Cranes?
What to do with your Panamax Cranes?
 
Crane Accidents and Emergencies Causes, Repairs and Prevention
Crane Accidents and Emergencies Causes, Repairs and PreventionCrane Accidents and Emergencies Causes, Repairs and Prevention
Crane Accidents and Emergencies Causes, Repairs and Prevention
 
Cascade Effects in Container Shipping -Implication for Regional and Feeder Ports
Cascade Effects in Container Shipping -Implication for Regional and Feeder PortsCascade Effects in Container Shipping -Implication for Regional and Feeder Ports
Cascade Effects in Container Shipping -Implication for Regional and Feeder Ports
 
Converting Existing Port Terminals —How we make it work
Converting Existing Port Terminals —How we make it workConverting Existing Port Terminals —How we make it work
Converting Existing Port Terminals —How we make it work
 
Kam Hybrid System RTGC
Kam Hybrid System RTGCKam Hybrid System RTGC
Kam Hybrid System RTGC
 

Recently uploaded

Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
jual Obat Aborsi Bandung, Wa : 085180626899 Apotik jual Obat Cytotec Di Bandung
 
zidauu _business communication.pptx /pdf
zidauu _business  communication.pptx /pdfzidauu _business  communication.pptx /pdf
zidauu _business communication.pptx /pdf
zukhrafshabbir
 
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
daisycvs
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
CaitlinCummins3
 
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
Spesiialis Kandungan BPOM
 
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg PfizerJual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Pusat Herbal Resmi BPOM
 
Constitution of Company Article of Association
Constitution of Company Article of AssociationConstitution of Company Article of Association
Constitution of Company Article of Association
seri bangash
 
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot ReportFuture of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
Dubai Multi Commodity Centre
 

Recently uploaded (20)

Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
 
Pay after result spell caster (,$+27834335081)@ bring back lost lover same da...
Pay after result spell caster (,$+27834335081)@ bring back lost lover same da...Pay after result spell caster (,$+27834335081)@ bring back lost lover same da...
Pay after result spell caster (,$+27834335081)@ bring back lost lover same da...
 
zidauu _business communication.pptx /pdf
zidauu _business  communication.pptx /pdfzidauu _business  communication.pptx /pdf
zidauu _business communication.pptx /pdf
 
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
 
stock price prediction using machine learning
stock price prediction using machine learningstock price prediction using machine learning
stock price prediction using machine learning
 
How to refresh to be fit for the future world
How to refresh to be fit for the future worldHow to refresh to be fit for the future world
How to refresh to be fit for the future world
 
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptxBlinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
 
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
 
MichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdfMichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdf
 
Raising Seed Capital by Steve Schlafman at RRE Ventures
Raising Seed Capital by Steve Schlafman at RRE VenturesRaising Seed Capital by Steve Schlafman at RRE Ventures
Raising Seed Capital by Steve Schlafman at RRE Ventures
 
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.docGuide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
Guide to Networking Essentials 8th Edition by Greg Tomsho solution manual.doc
 
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdfInnomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
 
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg PfizerJual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
Jual Obat Aborsi Di Sibolga wa 0851/7541/5434 Cytotec Misoprostol 200mcg Pfizer
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
 
Inside the Black Box of Venture Capital (VC)
Inside the Black Box of Venture Capital (VC)Inside the Black Box of Venture Capital (VC)
Inside the Black Box of Venture Capital (VC)
 
Constitution of Company Article of Association
Constitution of Company Article of AssociationConstitution of Company Article of Association
Constitution of Company Article of Association
 
Creative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team PresentationsCreative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team Presentations
 
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
 
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot ReportFuture of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
Future of Trade 2024 - Decoupled and Reconfigured - Snapshot Report
 

The Possible Effects of the Panama Canal Expansion on Ports in the Western Hemisphere

  • 1. XIX Latin American Congress of Ports July 7-9, 2010 • Manta, ECUADOR The Possible Effects of the Panama Canal Expansion on Ports in the Western Hemisphere By Larry Lam Chairman Portek International Ltd 1
  • 2. 2
  • 3. What we do Portek is both • a provider of equipment, services and solutions to ports worldwide, & • an operator of ports in emerging countries. • unique combination of skill sets, full spectrum of equipment engineering and port operating expertise 3
  • 4. As a provider to ports, we undertake” Modernization and Modification of Container Cranes — upgrading Cranes from PX to PPX dimensions, reliability, safety and performance improvement Sale and Lease of Port Equipment on quick deployment basis Mobilisation and Relocation of Cranes Maintenance contracts Crane accidents & emergencies recovery & repairs Consultancy in Traffic studies, port marketing program to attract traffic, port planning and simulations Port IT & Automation modules 4
  • 6. Port IT & Automation 6
  • 7. As a port operator, we operate 7 terminals: Bejaia Mediterranean Terminal (Algeria) Valetta Gateway Terminal (Malta) Port Owendou in Libreville & Port Gentil ( Gabon) Terminals T9 and T300 in Jakarta, Indonesia Banten Port, West Java, Indonesia 7
  • 9. How will Panama Canal expansion affect ports in the Western Hemisphere ? In this presentation, we will look at: Trade routes — Pre and Post Canal Expansion Cascade Effect & Canal Expansion on Size of Container Ships deployed Impacts on ports, winners and losers Bulk trades 9
  • 10. Western Hemisphere refers basically to the Americas: North America, Central America & the Carribean South America. 10
  • 11. Canal Expansion affects all shipping Container shipping — presently 30% of Panama traffic Bulk shipping Liquid Cruise, general cargo, Project cargo and Others. 11
  • 12. Trade routes generally fall into 2 categories: East — West trade routes: Far East — US West Coast (USWC) — Transpacific Far East — US East Coast (USEC) via Panama Far East — US East Coast via Suez Far East — S America West Coast (WCSA) Far East — S America East Coast. (ECSA) via Cape Europe — USEC (Transatlantic) North South trade routes: Europe — S America North America — Central and S America Intra-Latin America 12
  • 13. Cascade Effect Cascade Effect: Large ships displacing small ships in all trade routes due to emergence and large scale deployment of large post panamax ships For Cascade effect to take place, we must have: increased volume, hence justifying larger ships or same volume, but reduced sailing requencies, or both of above happening To analyse the full impact on ports, we will therefore consider Combined action of: Canal expansion + Cascade Effect. 13
  • 14. Cascade Effect By end of 2007, there were 188 Vessels of greater than 10,000 Teus on order, though some may have been postponed or cancelled. By 2011, Post Panamax Vessels will contribute about 45% of all container slots, after adjusting for some order cancellations 14
  • 15. LPPX/ SPPX 6,500+ – 12,500TEUs Displacing LPX/ PPX 4,000 – 6,500TEUs Displacing MPX 2,000 – 4,000TEUs Displacing SPX/Feeders 800 – 2,000TEUs 15
  • 16. Trade Route: Asia — US West Coast (Transpacific) CMA-CGM: South China / USWC Vessels >8000 teus Source CMA-CGM • Presently, high volume shuttle services using Large PPX vessels 8,000 to 10,000 TEUs • Pacific SW = LA + Long Beach + Oakland > 16m TEUs in 2008 • Pacific NW = Vancouver, Prince Rupert, Seattle, Tacoma > 6.3 m TEUs 16
  • 17. Effects on USWC Ports Post Canal Expansion 2014 — effects on USWC ports: Vancouver, P Rupert, Seattle, Tacoma, Portland, San Franscisco, LA /Long Beach Continue as gateway ports, handling own traffic; based on shuttle service from Asia Transshipment traffic unlikely, due to location, capacity and productivity. Will lose significant intermodal traffic to all water Panama route. US$2,000 to rail a container from USWC to USEC. Presently only 30% of Asian cargo go through USEC ports by all water route (via Panama or Suez) However, both railroads and ports are preparing to fight back to retain traffic. 17
  • 18. Trade Route: Asia —West Coast South America (WCSA) Presently, Asia-WCSA : Mainly direct long haul from Asia, using Panamax vessels Multi port calls. Long transit time 84 days Mostly Panamax vessels, though MSC now using 6,000 teu ship. Beside direct calls, there are also transshipment services via Balboa 18
  • 19. Trade Route: Asia — West Coast South America (WCSA) Post Canal Expansion Direct long haul multi port service may decrease in favour of transshipment via Balboa Transshipment to WCSA ports may come in two forms: • Piggy back on USEC traffic, on 8,000 to 10,000 TEU ships and transshipped via Balboa on feeders • Shuttle services from Far East to Lazaro Cadenas and Balboa, plus one other port, then transshipped via these to WCSA ports More capacity being created at Balboa - PPC & PSA Panama. A natural transshipment hub for Central America /WCSA traffic. Panama -The Singapore of Western Hemisphere. 19
  • 20. Effects on WCSA ports Balboa will be clear winner, transshipment hub for Central America and WCSA Manzanillo (Mexico), Lazaro Cadenas — Transshipment for Central America Will a transshipment hub emerge in WCSA? Present Load distribution still not in favour. Chilean ports presently contributes 3.0 m out of 5.8 m TEUs of WCSA total traffic. But Peruvian traffic fastest growing. Can Callao be a sub-regional transshipment hub? Feedering to Guayaquil, Paita, Arica, Iqueque, Antofagasta. Manta has ambitions: good depth and location, but lack of hinterland cargo is a disadvantage. It could be complimentary to Balboa, as a spill over port 20
  • 21. Case for Manta Port ? Source: Maersk Shipping Presently, Maersk’s Asia—Central America AC2 & AC3 services show dedicated shuttle service has sufficient volume Manta is one day sailing from Balboa, hence possible for shipping lines to extend one more port call to Manta within the shuttle service. Provided capacity is available, productivity is good. 21
  • 22. Trade Route: Asia — US East Coast (USEC) - Panama Source APL Trans-Pacific-443 Presently, this trade is characterized by Panamax ships less than 5100 teu, transiting through Panama Canal Only about 30% of Asian imports are shipped through USEC ports Transit time about 21 days. 16 weekly services of average capacity of4,000 teu 22
  • 23. Trade Route: Asia — US East Coast (USEC) Post Canal expansion, Quantum jump in ship size - Post Panamax ships of probably up to 10,000 teu Intermodal traffic through USWC will substantially migrate to all water USEC. Cost savings per slot of 30% to 40% between 10,000 and 4,000 TEU ships Bayonne Bridge in New York —New Jersey limit ship size to about 7,000 TEUs New York-New Jersey represent 1/3 of USEC port throughput (15.5 m TEUs). Deployment of >10,000 TEU ships to USEC not justified due to insufficient load, if they cannot call New York/New Jersey. Bridge of the Americas in Panama can also be a limitation for vessels > 14,000 teus. 23
  • 24. Impact on USEC Ports New York/New Jersey mayl miss the boat, limited to 7,000 TEUs. However, studies have been done to raise from 151 ft to 215 ft. Senate recently approved bridge heightening. Also PONYJ is builidng new terminal at Bayonne In Panama, Bridge of the Americas has an air draft of 201 ft Savannah, Virginia, Charleston will gain market share, expand their hinterlands, become gateways for intermodal traffic. More likely 8,000 to 10,000 teu ships. However, most other ports will also need upgrade for greater ship sizes due combined Canal Expansion & Cascade Effect 24
  • 25. Trade Route: Asia — USEC via Suez 25
  • 26. Trade Route: Asia — USEC via Suez Presently, 5 weekly services with vessels ranging from 5,000 teu to 8,500 teu These arise exactly because of constraints at Panama Canal. Transit time 31 days from Yantian to New York — long More suited for SE Asia / Indian Continent cargo Post Canal expansion Will see reduced services, only catering to Indian sub-continent Panama Canal route transit 21 days — 10 days shorter than Suez routes. 26
  • 27. Trade Route: Asia — East Coast South America (ECSA) via Cape of Good Hope Source CSAV 27
  • 28. Trade Route: Asia — East Coast South America (ECSA) Presently Direct long haul from Far East —ECSA via Cape of Good Hope. Mainly Panamax ships Multiport calls covering Bueno Aires, Montevideo, and all major Brazilian ports Post Canal expansion, Ship size will continue to increase due to increased load and Cascade factor. Multiport calls, with Santos as the dominant port Some cargo may shift to piggyback on Asia-USEC trade, and transship via Coco Solo, Panama to Brazilian ports. 28
  • 29. Impact on ECSA ports of Brazil, Uruguay and Argentina Direct, Multiport services from Asia and Europe still dominant Some minor impact from Canal expansion Brazilian ports are high cost (USD 300 vs USD 100), lack of capacity Santos an obvious load centre, substantial investments being made, however, need to look at port tariffs. Argentina (La Plata), Uruguay (Montivideo) expanding port capacity. All major ports will see higher volume, larger ships, due to GDP expansion 29
  • 30. Trade routes: Carribean / Central American /Gulf Source CMA-CGM Region is served by direct multiport calls from Europe, as well as Asia 30
  • 31. Trade routes: Carribean / Central American /Gulf Source CSAV Also by feedering from Carribean hubs such as Kingston, Caucedo 31
  • 32. Trade routes: Carribean / Central American /Gulf Presently, This region is served by direct service from Asia, and Europe & also piggybacking on the Asia- USEC services via transshipment. Transshipment hubs: Kingston, Caucedo, Bahamas, Colon & Manzanillo in Panama, Cartagena Most of Carribean / Central American / Gulf ports are feeder ports. Post Canal Expansion Same trade pattern but with larger vessels and trending towards higher proportion of transshipment, and reduced direct service 32
  • 33. Impact on Carribean / Central American /US Gulf ports Post Canal expansion: Major ports will see dramtic increase in ship sizes 5,000 to 10,000 teus Balboa will be clear winner on Pacific side Coco Solo (MIT & CCT), Cristobal (PPC) winners on Atlantic side Kingston, Caucedo, Cartagena will also benefit US Gulf Ports may lose some direct calls due to location, low load level, and become more of feeder ports. Cascade effects will put pressure on all ports to receive larger ships. Some ports need to reform labour practices, customs procedures. Central American state run ports. 33
  • 34. Trade Route: Europe — USEC (Transatlantic) North Europe - US East Coast Transatlantic trade will not be much affected by Canal Expansion. Cascade effect will push ship sizes. 34
  • 35. North- South Trade: Europe — South America Source CSAV 35
  • 36. North- South Trade + others: Europe — Latin America trade will be predominantly influenced by Far lower volume, hence Panamax vessel sufficient. Cascade effect — migrating to bigger vessels in step with growing volume. Similarly for N America — S America trade. Intra —Latin American trade in terms of bulk commodities and re-distribution of cargo from Logistic and distribution centres established in Panama and elsewhere. North - South trade does not have same Impact on Ports as East-West Trade. 36
  • 37. Factors influencing types and size of ships calling at ports Navigational factors — water draft, air draft, Canal restrictions. Load or Volume of cargo - Pull factor Cascade Effect — Push factor Port factors — turn-around time: productivity, capacity, equipment, labour practices Other factors like security, piracy, legislation such as Jones Act, Cabotage laws 37
  • 38. Concentration Effect Deployment of large SPPX ship leads to concentration effects: Cargo will be concentrated in fewer ships, larger ships Cargo will be concentrated in a few hub ports, and transshipped to final destinations Slot sharing or joint service Sailing frequency may reduce — recent example of slow steaming as a response to high fuel costs and excess capacity at expense of shippers. 38
  • 39. Effect of Canal Expansion on Bulk cargo trade Presently 85,000 dwt bulk Panamax bulkers transit Canal Post expansion will see Cape sized vessel of 120,000 dwt, upto 175,000 dwt. Draft increase from 39.5 ft (12m) to 50 ft (15m) Lower freight from better utlisation of Panamax vessels or from use of larger vessels Will see increase of following trades: Grain flow from US Gulf, to Asia and WCSA Metallurgical coal from USEC to Asia Iron ore from northern Brazil, thermal coal from Colombia to Asia Minerals from Chile and Peru to USEC and Europe will get a boost. 39
  • 40. General Comments / Questions: For Latin America, strong economic growth, commodity cycle, and increased world trade will drive container traffic and port business. A replay of South East Asia in the 90’s. Canal expansion is only a facilitator, not a cause. Extent of Canal impact will largely depend on the Canal tariff. Alternatives are already available. Shipping lines are flexible, and able to re-route to avoid high costs. Increased trade volume, ship size, and canal expansion favour transshipment. However, not a winners take all case. Numerous minor transshipment ports will co-exists with the major hubs to take the spill over, and provide non available berthing windows at the major hubs. Port Authorities need to take a business like view of port development. New transshipment centres requires huge investment outlay and competitive pricing. Not every one’s game in today’s deleveraging world. 40
  • 41. General Comments / Questions: Is there a lack of coastal shipping choices to stimulate feeder shipping? New impetus for Policy makers to overhaul Cabotage laws to promote freer and competitive short seas shipping, to reduce distortions to economies. Example: it costs more to ship a container from San Antonio to Iquique than San Antonio to Callao Development of feeder port vital for economy and industries of the particular province. Example: In Mexico, Mazatlan and Guayamas not well served by feeder shipping. Cabotage trade now mainly done by trucking. Long coast lines of S America favour seaborne traffic versus land transport. To be encouraged as a greener alternative. 41
  • 42. Thank you 42