CKYH capacity cut to impact PacNW ports
Announced capacity cuts by a major ocean shipping alliance are likely to have major ramifications for the Pacific Northwest.
The CKYH Alliance — China Ocean Shipping Co., Hanjin Shipping , 'K' Line and Yang Ming Line — said Wednesday it plans to either suspend or reduce capacity on six routes serviced by the consortium, two of which call in the United States. One of the routes to be cut, the Mediterranean-Asia-America pendulum service, calls at California ports.
The 13 vessels involved in the capacity reduction provide nearly 15 percent of the total capacity in the Pacific Northwest. Pacific Northwest ports such as Seattle and Tacoma, already facing a severe financial downturn, will be hard hit by the reduction.
Cargo volumes at the port of Seattle through October are down 11.5 percent compared to the year-ago period. The port has also recorded double-digit declines for the past five months, including a 14 percent decline in October, a nearly 20 percent drop in September and a 22.6 percent drop in August, all compared to the same months in 2007.
In addition, Seattle port officials are predicting that the port's 2009 net income will dip $1.3 million to $209.8 million, before depreciation, and to $58.7 million, after depreciation. Net assets are also expected to drop next year to $111.5 million, a 23 percent drop from $145.1 million in 2008.
Cargo volumes at the Port of Tacoma are down 2.3 percent for the year compared to the same period in 2007. In September, the typical start of the peak shipping season, Tacoma officials report that cargo volumes were down 6.5 percent compared to Sept. 2007.
The CKYH move comes less than a month after the alliance announced it was suspending its all-water service to the U.S. East Coast, slashing its Asia/East Coast capacity by 18 percent. The group also said it would be cutting its Mediterranean services.
CKYH capacity cut to impact PacNW ports
