Asia/Europe, transpacific contrasts remain

Asia/Europe, transpacific contrasts remain    There are fundamental differences that keep the transpacific and Asia/Europe trades from resembling one another, according to an executive with liner carrier OOCL.
   Speaking at the TPM Asia conference in Shenzhen last week, OOCL Director of Corporate Planning Stephen Ng said there's a reason why the world's largest containerships ply the Asia/Europe route in lieu of the transpacific.
   'All the benefits of economy of scale are found in Asia/Europe,' Ng said at the conference, organized by the Journal of Commerce. 'Why are big ships not coming to the transpacific? Without terminal productivity, we will hesitate to put large vessels into those ports.'

Ng

   Ng said that as of October, there are 61 vessels of 10,000 TEUs or larger deployed between Asia and Europe, compared to three on the transpacific. The average vessel size on the Asia/Europe lane is 7,815 TEUs, compared to 5,346 TEUs on the transpacific.
   And while North American terminals could conceivably match the productivity standards of those in Europe, at least enough to lure carriers to use larger ships, a geographical constraint still muddies the waters. Europe tends to operate within a port-to-port structure, while much of the transpacific volume is destined for locations far inland.
   'It's a logistics nightmare to manage the movement of empties in inland locations,' Ng said. 'The cost and complexity of moving empties, these factors will influence whether Asia/Europe and the transpacific will resemble each other more in the future.
   'It's not easy to bring transportation costs down in North America. Moving empties around the country is not easy — unless we can move a whole train, the railroads say it is not efficient.'
   To bolster Ng's comments, COSCO Container Lines told American Shipper in mid-October that it plans to continue deploying its largest ships between Asia and Europe, even after the Panama Canal is widened.

Olesen

   However, another speaker at TPM Asia, Henrik Olesen, chief operating officer of Damco, said he sees the two trades closer than one might imagine.
   Olesen cited Drewry statistics that the non-vessel-operating common carrier share of the Asia/Europe trade is 50 percent, while it's 38 percent on the transpacific trade.
   Considering that the Asia/Europe trade is thought of as one controlled by forwarders and the transpacific by cargo owners, that gap isn't too wide. Olesen asked rhetorically whether NVOs could push their transpacific share to 50 percent in the next four to six years.
   'We believe the transpacific and Asia/Europe are growing closer,' he said, adding he sees growing expectations from customers for end-to-end solutions.
   'BCOs are getting more global across trade lanes,' he said. 'They are expecting same services on those various lanes.' ' Eric Johnson