Source: Journal of Commerce
July 1st 2015
The arrival of mega-ships is having a profound effect on port operations at all major U.S. gateways, but the biggest impact by far in terms of congestion is being felt in the two largest port complexes, Los Angeles-Long Beach and New York-New Jersey.
That’s because the number of containers lifted on and off of the big ships during each vessel call in Southern California and New York-New Jersey dwarfs the container moves per vessel call at all other U.S. ports, and all other ports in the world, for that matter.
Numbers collected and processed by PIERS, a sister company of JOC.com within IHS Maritime and Trade, shows that for vessels with capacities of 8,000 twenty-foot-equivalent units or greater, the number of containers lifted on and off of the ships during each call averages 5,108 in Los Angeles-Long Beach and 4,295 in New York-New Jersey.
Container moves per vessel call in other ports are much less. In Norfolk, the average container lifts on and off vessels of 8,000-TEU capacity or greater is 1,592. It drops to 1,367 in Savannah and 792 in Oakland. PIERS numbers for even the busiest ports in the world in Asia and Europe list the average as being between 2,400 and 3,800 container lifts per vessel call, even though 18,000-TEU ships are becoming common now in the Asia-Europe trades. In those trades, vessels will make a half-dozen calls along the way, generating only 2,000 to 3,000 container moves per port call.
Large vessels, by their mere presence, cause significant challenges for all ports in terms of infrastructure requirements. Harbor channels must be dredged to a depth of 50 feet and in some cases widened. Larger and stronger wharves are needed to accommodate super post-Panamax cranes that reach out over 22 rows of containers on the ships. These requirements, however, are only the price of admission into the mega-ship arena.
The greatest challenge comes from the surge of containers that must be lifted off of and on to a vessel in a narrow window of time. Surges of 4,000 to 5,000 containers over the two to three days the ships are in port choke a terminal’s yard and gate operations and often generate long lines of angry truckers at the gates.
Larry Nye, vice president of port planning at Moffatt and Nichol engineers, said that in the past with smaller cargo volumes, terminals would take a day or two to unload the vessel and another couple of days to “clean up the mess” that was created in the yard. With today’s vessels of 8,000 to 14,000-TEU capacity, “there is no time to clean up the mess,” he said.
It is not surprising, therefore, that Los Angeles-Long Beach and New York-New Jersey experience more congestion than other U.S. ports, and why terminal operators in those gateways are among the first to automate their operations, said Mark Sisson, who leads the marine analysis group at AECOM. He was referring to the TraPac terminal in Los Angeles, the Middle Harbor terminal in Long Beach and Global Terminals in New York-New Jersey. “People with money are putting it into those ports,” he said.
The congestion issues that the busiest port complexes on each coast will face over the next few years will accelerate because carriers are flooding the major trade lanes almost exclusively with vessels that have capacities ranging from 10,000 to 22,000 TEUs.
Los Angeles-Long Beach for more than a year now has been handling ships with capacities of as much as 14,000 TEUs that generate more than 10,000 container moves per vessel call. “I am planning now for 17,800 moves from 18,000-TEU vessels, and they will be here soon,” Nye said. He added that those vessels must be worked in no more than five days because the terminals will need two days to move inbound containers off the docks before the next 18,000-TEU ship arrives.
The reason why Los Angeles-Long Beach and New York-New Jersey have more container moves per vessel call than any other ports in the world is that vessel operators discharge and reload very high percentages of the containers in those first-in gateways. “They go where the people are,” Sisson said.
Also, unlike European and Asian ports that do a lot of transshipment from barges and feeder vessels, the two large U.S. gateways handle almost exclusively full containers moving inland and a mix of export loads and empties leaving outbound, with little to no transshipment.
Los Angeles-Long Beach is unique among all ports because carriers in their Pacific Southwest services call at only two ports, Southern California inbound and Oakland outbound, Nye said. Most lines discharge and reload 85 to 90 percent of the vessel content in Los Angeles-Long Beach. Some carriers do 100 percent discharge and reload and send the vessels right back to Asia, he said.
The percentage of vessel contents handled in New York-New Jersey is not quite as high because vessel strings usually call at three or four East Coast ports. Nevertheless, New York-New Jersey container moves are substantial, as evidenced by the PIERS numbers that show an average of 4,295 container moves per vessel call in New York-New Jersey before dropping to 1,592 in Norfolk and 1,367 in Savannah.
Industry planners say the major gateways, especially Los Angeles-Long Beach and New York-New Jersey, must respond to the container surges with immediate and mid-term solutions. Right now, the need is for extended gate hours. At the same time, the busiest terminals must be designing and introducing automation. “Longer hours and automation. Those are the most obvious tools in the toolbox,” Sisson said.
While these tools are apparent, they’re also expensive. Somebody has to pay for the extra labor on the docks, the added truck capacity needed to more than double the number of hours drivers must work and the added labor costs for second shifts at receiving warehouses.
However, those costs pale in comparison to automating a marine terminal. Existing automation projects run about $200 million to more than $500 million.
While automation has numerous benefits, the most crucial function of automation is to separate vessel operations from street traffic, Nye said. In the current manual environment, trucks penetrate deep into the terminal and interfere with the movement of containers from the vessel to the stacks and from the stacks to the gate, he said.
In an automated environment where the container stacks are positioned perpendicular to the vessel and the gates, automated horizontal transportation vehicles move the containers from the foot of the ship-to-shore crane to the waterside of the stack. An automated stacking crane lifts the container into the stack. When the street truck arrives, it is backed into the gate side of the terminal and a second automated stacking crane lifts the container on to the chassis. “In an automated terminal, the truck sits there at the end of the stack and it doesn’t get in anybody’s way,” Nye said.
Longshore union do not favor automation due to the loss of jobs, but Nye said manually-operated equipment can’t operate in the dense environment that is produced by big ships with huge container discharges. “The top pick doesn’t work anymore,” he said.
Terminal operators say they will only invest $200 million or more in automation if they can generate the volume they need to achieve the efficiency and labor savings inherent in automation. Nye doesn’t think volume will be an issue at the busiest terminals. In Los Angeles-Long Beach, a weekly vessel string with 18,000-TEU ships doing 90 percent discharge and reload will generate 1.6 million TEUs a year, he said.
Terminal size could be an issue, however. To operate in this high-density environment, a terminal must handle at least 7,000 TEUs per acre, so with a single weekly call by an 18,000-TEU vessel, the terminal must be at least 230 acres in size. Some Southern California terminals are 300 to 400 acres in size, so they can handle one mega-ship of 18,000-TEU ship and ship of 10,000 to 14,000 TEUs simultaneously, he said.
For smaller ports on both coasts, full automation is still some years off, but for Los Angeles-Long Beach and New York-New Jersey, planning and implementation of automation at the busiest terminals must start soon, Nye and Sisson said.