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This special Drewry research paper provides a detailed analysis of the serious capacity and service issues confronting the Transpacific container trade, and evaluates each of the key factors that will shape the development of the Suez route as a new and important piece of the Transpacific service jigsaw puzzle.

The Suez route will become an important factor in the Transpacific container trade and market participants carriers, ports, rail-roads and cargo interests can fast-track themselves into a position of greater understanding and readiness by acquiring this original and unique piece of Drewry research.

Find out more or order your copy of Asia - ECNA via Suez: A New Solution for the Transpacific Supply Chain today...

Executive summary
                       —    Key points
                       —    Transpacific container trade
                       —    WCNA ports
                       —    Capacity
                       —    Projected WCNA port utilisation
                       —    Transit times
                       —    ECNA port capability - post-Panamax containerships
                       —    Post-Panamax vessel availability
                       —    Panama Canal capacity
                       —    The economic justification

Section 1.    Transpacific container trade

Section 2.    WCNA port capacity
                       —    Regional overview
                       —    Capacity
                       —    Southern California
                       —    Northern California
                       —    Pacific North West
                       —    Summary of potential WCNA capacity development
                       —    Projected WCNA port utilisation

Section 3.    Transit times

Section 4.    ECNA ports and post-Panamax containerships
                       —    Draft
                       —    Air draft

Section 5.    Post-Panamax vessel availability

Section 6.    Panama Canal capacity

Section 7.    The economic justification



Tables

• Historic development of the Transpacific trade
• Recent development of Transpacific services by routeing option
• Break-down of WCUSA international trade by route
• Estimated capacity utilisation at WCNA ports, 2005
• Projected development of WCNA container port capacity to 2010
• Projected development of WCNA port capacity utilisation to 2010 - historic traffic growth
• Projected development of WCNA terminal capacity balance to 2010 - historic traffic growth
• Summary of transit time performance by route, selected carriers
• Post-Panamax containerships - average draft by size range
• Summary - indicative air draft of large containerships
• Projected post-Panamax vessel requirement, main east-west trades - to maintain vessel utilisation at end 2005 levels
• Summary costings - Panama and Suez options
• The scorecard for the Suez route
• Historic development of the Transpacific trade
• US imports in the eastbound Transpacific trade by entry port region
• Transpacific all-water services, January 1, 2006
• Recent development of Transpacific services by routeing option
• North American port call structure of the Panama all-water ECNA services
• North American summary of the Panama all-water ECNA services
• Asian port call structure of the Panama all-water ECNA services
• Asian summary of the Panama all-water ECNA services
• Development of WCNA port volumes, 1995-2005
• Break-down of WCUSA international trade by route
• Seasonality in the Transpacific trade
• Estimated capacity utilisation at WCNA ports, 2005
• Overview of container handling terminals, Southern California, 2006
• Forecast development of terminal container capacity in southern California, 2003 - 2010
• Overview of container handling terminals, northern California, 2006
• Forecast development of terminal container capacity in northern California, 2003 - 2010
• Overview of container handling terminals, Pacific North West, 2006
• Forecast development of terminal container capacity in Pacific North West, 2003 - 2010
• Projected development of WCNA container port capacity to 2010
• Projected development of WCNA port capacity utilisation to 2010 - historic traffic growth
• Projected development of WCNA terminal capacity balance to 2010 - historic traffic growth
• Estimated coastal split of ECNA/USG eastbound Transpacific cargo market
• Distance comparison for selected Asia/ECNA port pairs by routeing option
• US imports in the ISC/Mid East trades by US port range
• Typical advertised Transpacific transit times ex Hong Kong by route
• Typical advertised Transpacific transit times ex Laem Chabang by route
• Summary of transit time performance by route, selected carriers
• Post-Panamax containerships operating to ECNA ports, January 2006
• Reported water depth at main ECNA ports, before tides
• Post-Panamax containership fleet by draft
• Post-Panamax containerships - average draft by size range
• Post-Panamax containership order-book by year of delivery
• Air draft of selected Panamax containerships
• Typical physical characteristics of a 5,500 teu Post-Panamax containership
• Air draft of selected post-Panamax containership
• Summary - indicative air draft of large containerships
• Post-Panamax containerships - projected constitution of the fleet by start 2009
• Post-Panamax containerships by route deployment, start 2006
• Post-Panamax containership component of route deployment, start 2006
• Projected post-Panamax vessel requirement, main east-west trades - to maintain vessel utilisation at end 2005 levels
• Historical evolution of total transits in the Panama Canal
• Historical evolution of average ship size - vessels transiting the Panama Canal
• Standard service itineraries - Panama and Suez options
• Key cost assumptions
• Reported fuel consumption of selected containerships
• Summary costings - Panama and Suez options

Figures

• Vessels queuing at anchor waiting for berths at LA/LB between June and October 2004
• Number of vessels waiting for berth access at LA/LB, July - November 2004

Time for new strategies to beat the Transpacific supply chain crisis

Container trade has always looked for the cheapest and/or fastest routes, and carriers, exporters, importers and (unknowingly) consumers have all assumed that established cargo pipelines would continue to accommodate whatever traffic volume was thrown at them.

Infrastructure overstretched

But in 2004, when the major ports of Southern California experienced severe peak-season congestion in the face of a second successive year of record global container traffic growth, the impact was felt throughout the sector. Possibly for the first time in the modern era, and certainly for the first time in the developed OECD nations, the physical infrastructure, needed to discharge containerships and distribute the cargo inland, was found wanting.

Given the great shift of productive capacity away from the Western nations and into Asia, and the consequent sustained rise in cargo volumes - especially on the Transpacific route - the global economy had become totally dependent upon a seamless supply chain that had container transport capacity at its heart. Congested terminals, vessels queueing for days and a breakdown in the certainty of intermodal performance highlighted the fragility of the low inventory, just in time, outsourced production model.

Reliability and predictability key

Suddenly, it was no longer the fastest or cheapest supply chain that seemed the ideal. In an imperfectly functioning distribution world, reliability and predictability became equally important requirements to ensure the continuous flow of product supply.

Shifting capacity

In the Transpacific trade, carriers and importers responded first by shifting capacity and cargo to the PNW and Oakland gateways to avoid terminal congestion in Los Angeles/Long Beach; second by shifting capacity and cargo to the US East Coast ports through Panama all-water services to avoid the congestion in the trans-continental railroad network; and then by improving productivity of the existing infrastructure to increase capacity.

But while such solutions have brought a period of respite and allowed the cargo to flow once more (2005 and 2006 were congestion free), it couldn't hide the fact that the congestion beating strategies were likely to encounter capacity constraints sooner rather than later -whether at the Panama Canal, or at US west coast ports, or in the intermodal network. In reality it became clearer that the Transpacific trade was trying to force an ever growing volume of cargo through a relatively static infrastructure.

Suez a 21st century Transpacific routeing

The fact that the world is round gave carriers the idea that the Suez routeing might be another safety valve for the Transpacific trade. Despite brief excitement at the possibility of Suez routes from SE Asia to ECNA in the early 1990s, the concept has failed to convince carriers that it was a cost effective option. As the cargo source in Asia has concentrated evermore in China, and down-rated the significance of the SE Asian market, the idea has almost disappeared from the schedules.

But with the powerful strategic need for carriers and North American importers to develop long term alternatives to the inevitable recurrence of the congestion disruption of 2004, there is a clear need to make the Suez route work. And indeed now the factors that have previously prevented the concept from playing anything more than a bit part in the Transpacific container trade are all coming together.

The Drewry Report looks at all these issues and shows how the commercial and operational drawbacks that once characterised the Suez route have either already become a source of advantage, or will reach that status within the next couple of years. In 2006, Maersk Line inaugurated a new Suez string from SE Asia, and more carriers are known to be looking closely at the idea. But the true breakthrough for the Suez route on the Transpacific trade will be when the economics of extending these services to the enormous southern China market become convincing. Drewry analysis suggests that the moment has already arrived, and that carriers and importers should be positioning themselves now to participate in the new opportunities emerging.
 

The Suez route will become an important factor in the Transpacific container trade and market participants carriers, ports, rail-roads and cargo interests can fast-track themselves into a position of greater understanding and readiness by acquiring this original and unique piece of Drewry research.

Order your copy without further delay.