Industry sees gap between Asia, U.S. in tackling port congestion

Industry sees gap between Asia, U.S. in tackling port congestion    Major ports in Asia are investing in larger container terminals and broadly keeping up with volume growth, allowing them to avoid the congestion that is increasingly plaguing many U.S. and European ports, according to industry analysts, ocean carriers and port operators.
   “The biggest congestion is on the West Coast of the U.S.,” said Hans-Hermann Mohr, chief executive officer of Senator Lines. “Now, it’s spreading to Europe,” he told the TOC conference in Hong Kong today.
   “Most industry observers know the capacity problem is the U.S. West Coast,” Charles de Trenck, analyst with Smith Barney-Citigroup, told the conference.
   By contrast, Asian ports are coping well with growing volumes, even in the areas where growth is the fastest.
   “Asia is efficient at pushing its exports,” de Trenck said. “Asia and China have a long track record of breaking new productivity levels.”
   Moreover, the ports of Hong Kong, Qingdao in northern China, and Gwangyang in South Korea, have reserves of capacity, while ports like Shanghai and Ningbo are adding capacity.
   Industry players and analysts cited several reasons for the gap between the situations of Asian and western container ports.
   De Trenck suggested that less efficient working practices in the United States hinder port productivity and contribute to congestion.
   According to a major transpacific carrier, the productivity per crane hour in the United States is 20 to 25 container moves from or to the ship, as compared to 35 in most Asian ports. The introduction of new technology and longer gate working hours to raise the throughput per acre in the United States has also been cited. Besides fast vessel operations, terminals must have efficient terminal gate and rail operations, analysts said.
   “It’s not so much the lack of facilities, but the labor situation,” said Jack Helton, vice president at APM Terminals in the Middle East and former CEO of Salalah Port Services, a transshipment hub with a track record of high productivity.
   One difference between building a terminal in the United States and in Asia is the stricter environmental constraints that exist in America, Helton added. “It’s very difficult to work your way through environmental impediments in the United States,” he told American Shipper.
   The government of China is “not lenient, but proactive” concerning port development, and has funds to invest in ports, he added. U.S. port authorities find it difficult to raise bonds to finance port projects, he added.
   Asked how much longer the situation of congestion would last in the United States and Europe, Mohr replied: “I would say two to three years. The biggest problem is the land side (of terminal operations), not the sea side.”
   However, Helton said that neither the ports nor the ocean carriers anticipated the rapid container volume growth that has happened in the past years. “Everyone in the past two years has grossly misjudged the market,” he said. “Who would have thought that many ports would become congested?”
   Meanwhile, Shanghai, Ningbo, Shenzhen and Busan are planning huge expansion plans to accommodate future growth.
   De Trenck expects that the ports of Yantian, Shekou, Chiwan and Nansha will add 11 container berths between them over the coming year. There is “no shortage of capacity in the Shenzhen-Hong Kong corridor, home to the world’s largest port complex,” he said. Ports in South Korea have substantial excess capacity, with utilization in Gwangyang estimated to be only 25 percent, he added.