Expanded Canal: Shipping economics. US east coast ports. Caribbean and Central American ports. Other implications. Agenda

Transcription

1 Panama Canal expansion: Implications for container ports Neil Davidson Senior Analyst Ports & Terminals PIANC Seminar: Widening the Panama Canal London, 28 October 2013 Agenda 2 Expanded Canal: Shipping economics US east coast ports Caribbean and Central American ports Other implications 1

2 Ship size development 3 Vessel Length (m) Beam (m) Max draft (m) Deadweight TEU SS Ancon ,500 Nil Panamax ,000 4,900 New Panamax ,000 13,200 Triple E (post New Panamax) ,000 18,000 SS Ancon: First official transit of the Panama Canal, August 1914 Alternative routes: Asia to US Midwest 4 US/Canadian west coast landbridge ~21 days All-water via Suez and US east coast ~30 days All-water via Panama and US east coast ~25 days ~25 days Route Distance (nm) Shanghai-Los Angeles 5,708 Singapore-Los Angeles 7,669 Distance Route (nm) Shanghai-New York (Panama) 10,582 Singapore-New York (Panama) 12,506 Distance Route (nm) Shanghai-New York (Suez) 12,370 Singapore-New York (Suez) 10,133 2

3 Shipping cost implications of expanded Canal 5 Asia US east coast route: Vessel upsizing From 5,000 to 8,000 teu From 5,000 to 13,000 teu 15-20% cost saving 30-35% cost saving dependent on expanded Panama Canal toll levels. Current cost is $72 per laden teu Shipping cost implications of expanded Canal 6 Cargo from Asia to eastern US Cost sensitive low value cargoes Currently using US west coast ports and intermodal rail Time sensitive high value cargoes Currently using US west coast ports and intermodal rail Switch to Canal all-water route Stick with the faster landbridge route 3

4 Shipping cost implications of expanded Canal 7 Cargo from Asia to eastern US Cost sensitive cargoes Time sensitive cargoes dependent on expanded Panama Canal toll levels (unknown) dependent on pricing policy of shipping lines (unknown) dependent on pricing reaction of US railroads (unknown) Agenda 8 Expanded Canal: Shipping economics US east coast ports Caribbean and Central American ports Other implications 4

5 9 Main US East Coast port infrastructure investment for expanded Panama Canal implications does not include terminal equipment etc $3.5 billion and counting. 10 Port Project Estimated Likely earliest completion date cost New York / Raising Bayonne $1,290m New Jersey Bridge Savannah Dredging to 47ft $652m No date announced but likely to be similar to Charleston Charleston Dredging to 50ft $300m Jacksonville Dredging to 47ft $733m 2020 Miami Dredging to 50ft $206m 2015 Port Everglades Dredging to 48ft $313m

6 Investment cost comparison Cost of upgrading US east coast ports is starting to approach the cost of expanding the Canal 4 US$ billion Upgrades to main US east coast ports Panama Canal expansion We Can t Wait 12 President Obama s We Can t Wait initiative Launched mid 2012 Focused on the streamlining review and permitting process Designed to expedite works at 5 east coast ports: New York/New Jersey, Savannah, Charleston, Jacksonville and Miami Aims to reduce the time for feasibility studies from an average of 10 years to 3 years Does not fast track funding Federal funds State funds Local funds 6

7 Sitting pretty Norfolk 50ft draft Cranes of up to 25 boxes outreach (Maersk Triple Es are 23 boxes wide) 13 Baltimore 50ft draft New terminal with Post-Panamax cranes 14 Will all carriers move to 13,000 teu ships from day 1? In any case, will all the ports see the big ships? 7

8 Agenda 15 Expanded Canal: Shipping economics US east coast ports Caribbean and Central American ports Other implications 16 New terminals being built by ICTSI and APMT Operator bidding process under way Panama has large terminal expansion plans 8

9 17 Mariel, Cuba PSA? US embargo issues Cortes, Honduras ICTSI redeveloping Moin, Costa Rica APMT say not for t/s Ponce, Puerto Rico $250m spent but project stalled Caribbean and Central American transhipment 18 More hub and spoke transhipment to fill bigger ships More relay transhipment to maximise network opportunities Existing hub ports the most likely beneficiaries of growth Shipping lines may need to have western and eastern hubs in the Caribbean (like the Med) More shipping line alliances - to fill bigger ships Will result in some reduced direct calls in some Central American and North Coast South American ports US Gulf ports feedering a question mark 9

10 Agenda 19 Expanded Canal: Shipping economics US east coast ports Caribbean and Central American ports Other implications Companies will review their Asia-Americas supply chains 20 Possible changes: Use Panama or the Caribbean as a regional distribution hub More US East Coast and Gulf Coast port-based distribution centres for Eastern and Midwest distribution 10

11 Other implications 21 Panamax ships (5,000 teu) will become surplus and largely obsolete Will affect ports on old Panamax routes e.g. West Coast South America Europe Global vessel cascade effect also evident and more significant for ports Largest deployed vessels, 2013: Asia - North Europe: 18,000 teu Asia - Mediterranean: 14,000 teu Asia - US West Coast: 13,100 teu Asia - East Coast South America: 8,700 teu Europe - East Coast South America: 8,762 teu Asia - West Coast South America: 9,178 teu Asia - Middle East: 14,074 teu Europe - South Africa - Asia: 12,552 teu India s Mundra Port today handled one of the largest and longest container vessels in the world - MSC Valeria, having a capacity of 14,000 teu Source: Economic Times, 5 June 2013 In conclusion Image : klitschko.com 11

12 Conclusions 23 Expanded Canal will change container flows to/from USA, to the benefit of east coast ports, but numerous factors will affect extent Not all US east coast ports will be ready to handle fully loaded new-panamax ships in 2015 but may be not all need to be Transhipment growth at existing Central American and Caribbean hubs will be evident Shippers will change supply chains 24 Providing maritime intelligence for over 40 years Unique expertise of shipping industry senior executives and knowledge base Our services include: Maritime research and publications Bespoke consultancy Investment advisory Maritime equity research World Container Index Thank you! 12

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