Container terminals at global top-12 cargo gateways are not even using half of their quay crane capacity, so they can’t truly be considered congested, according to CTI port export Andy Lane.
Marine terminals should have to be fully utilized before they can be considered congested, port consultant Andy Lane told the TPM Asia conference in Shenzhen last week.
“Assets that are only 48 percent utilized, I’m not sure how that lines up with ‘congestion,’” said Lane, a Singapore-based expert with CTI Consultancy.
During his presentation, Lane showed a chart estimating that the 12 largest cargo ports in the world by volume are only using 48 percent of their capacity in terms of throughput per quay crane. By improving the average productivity of those cranes from 28 moves per hour to 32 moves per hour and increasing the number of hours the cranes are in use by roughly 25 percent, the 12 gateways could unlock $800,000 in revenue per container crane – an estimated $1 billion across all the quay cranes at those collective ports, according to Lane.
“There’s plenty of capacity there,” he said. “We’re just not making use of it.”
Lane also argued that so-called mega vessels (ships with capacity of 10,000 TEUs and above) should not be solely blamed for the congestion issues at ports worldwide, with a few exceptions. Mega vessels are responsible for just 22 percent of the container volume in Asia, said Lane.
“Hard to say then that mega-ships are responsible for the meltdown,” he said, though certain ports may have it worse than others in this regard. “In Los Angeles and Long Beach, (for example,) 80 percent of volume comes from 20 percent of vessels so that is a bit of a mega-ship issue.”
According to Lane, when it comes to congestion, there is another dynamic at play.
“What causes the cargo surge is the mentality of loading ships at the end of the week in China (after factories work all week),” he said. “That’s what causes the peak in China and the (feeder) ports in Asia. This has existed for years, and big ships exacerbate this. If we persist with bigger ships, we maybe need to revisit this mentality.”
The ripple effect of this schedule dynamic is that ships sail on the weekends from China, then arrive collectively at Southeast Asian hubs, and then at ports in North America and Europe since most services sail at relatively similar speeds.
Robbert Jan van Trooijen, chief executive north Asia region at Maersk Line, agreed with Lane’s premise, noting that factories in Asia are effectively running seven days a week anyway.
Van Trooijen noted two other factors that create uneven cargo flow. He said 60 percent of monthly cargo gets shipped in the second half of the month because sales people realize they need to meet their monthly targets as month’s end draws nearer. As a result, “end month calls tend to be oversubscribed and early calls tend to be undersubscribed.”
Van Trooijen said another factor at play is that shippers tend to wait out carrier rate increases.
“Just before a GRI is goes into effect, there’s a cargo rush,” he said. “And right after, shippers withhold cargo and wait for carriers to come off those higher rates. It’s a good bargaining tactic, but from a cargo flow perspective, it’s not effective.”
Port consultant: Marine terminals not ‘congested’ if underused
