Insights - September 2017 - 19

MEGAVESSELS - from page 17
difficult for us, with a shorter window to pick up more volume. We
want our customers to understand that our capacity is finite. We
don't have the ability to ramp up significantly for a day, a week or
a year."
Kellaway explained that capacity, an industry-wide concern, is
closely tied to the ongoing challenge of finding qualified drivers.
"That's becoming more and more difficult," he said.
The situation is compounded by continued reductions in free
time to pick up containers that arrive in ever-larger numbers.
There also are concerns about chassis supply and matching up
equipment as larger ships haul multiple carriers' freight through
alliance arrangements.

Intense Pressure
"Clearly, the megavessels have helped drive down slot costs,
as they have also fueled the industry's endemic overcapacity," said
Alan Murphy, CEO of SeaIntel Maritime Analysis. "When some carriers got megavessels, they all needed megavessels, which ended
up hurting everybody. The end result has been that any savings
have been passed right on to shippers and forwarders."
He said megavessels are "a clear and real challenge for terminal operators."
"You need extra-shift crews, more re-stows, more complex
stowage planning and more short-term storage" when one megaship replaces two smaller ones. As a result, gates come under
pressure, chassis run short, roadways are congested and effects
stretch into the hinterlands.

"Terminals have invested many billions in the past decade
to be ready to handle these behemoths, and they need to see a
return on that investment," he added.
Tioga Group principal Dan Smith elaborated. "Once you
have the capacity at the berth, the marine terminals can load
and unload those vessels just fine. The tough part comes in the
container yard."
Smith said challenges arise as the terminal operator often
has to begin loading exports at the same time imports are being
unloaded in order to keep the yard fluid.
That issue is acute at load center ports, particularly on the
West Coast, where the largest ships take more time to unload,
and have more imports than exports. In addition to sheer quantity, complexity is added by alliances, each of which needs to
have its own containers readied for later truck movements.

'Working Smart'
"The terminal operators are working as smart as they can,"
Smith said. "The reality is that the longshore labor has to touch
the boxes more often and work harder in order to get the boxes to
the right place."
There are some potential steps to address the situation,
Smith said. They include creating a separate location so that
trucks can shuttle back and forth between on and off dock facilities and do the sorting away from the waterside. Another choice
is to create specific container stacks on the docks for large customers or motor carriers with high volume.
Rails are buffered a bit due to portside handling, but still face
Megavessels - continued on page 21

September 2017 | Intermodal Insights

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