Container lines’ use of sweepers

East Coast ports found it difficult to distinguish between ad hoc and normal rotations.    On March 18, the 10,062-TEU ZIM Tianjin became the largest ship ever to dock at the Port of Savannah. In less than 24 hours, longshoremen at the Garden City Terminal unloaded almost 2,000 containers—roughly a third of the vessel’s capacity—and the behemoth vessel departed for Kingston, Jamaica.
   Left unsaid amid all the local press and fanfare is that the ZIM Tianjin was an “extra loader” or “sweeper”—ad hoc containerships not part of any regular rotation, but pressed into service by liner carriers to help anxious customers avoid congestion at U.S. West Coast ports and move their cargo by all-water routes to the East and Gulf coasts. 
   The surge in demand for alternative ocean transport stems from recent labor turmoil layered on top of existing productivity problems at ports from Washington to Southern California, plus retailers’ desire to pre-order spring merchandise and ship cargo ahead of factory shutdowns for the Chinese New Year in February.
   The special sailings to sweep up backlogged cargo in Asia have contributed to a boom in business at East Coast container ports during the first quarter of 2015 and have proven so popular that at least one carrier is thinking about continuing the service on a regular basis.
   “These extra loaders proved to be a resounding success, receiving an enthusiastic customer response, with demand well beyond expectations,” Nissim Yochai, vice president of global sales for the Israeli carrier, said in an e-mail at the time. “ZIM is considering making the success a permanent line, offering a service from South China and South East Asia to the East Coast of the United States via the Suez Canal.”
   Such a move would lend credence to fears by many on the West Coast that the crippling effects of the recent eight-month labor dispute over a new dockworker’s contract and resulting work slowdown might lead to some permanent diversion of discretionary cargo by shippers seeking more reliable gateways for their imports and exports. 
   ZIM is currently rotating three extra loaders through the Suez Canal: the ZIM Tianjin, ZIM Chicago and ZIM San Diego, the latter two each having 8,500 TEUs of capacity. The vessels are picking up cargo in Qingdao, Shanghai and Ningbo in China, as well as Port Kelang in Malaysia before sailing to New York and Savannah. The ZIM San Diego called New York/New Jersey between March 23 and 26. A fourth filler vessel was planned for the end of April.
   The vessels were mostly discharging inbound cargo, but some sweeper ships were expected to pick up the surplus of empty containers, as well as any loaded with exports, another ZIM official, not authorized to speak with the press, said.
    According to ocean liner schedule and capacity database BlueWater Reporting, ZIM currently offers two services to the U.S. East Coast via the Panama Canal. The SCE service is offered as part of the G6 Alliance and the ZCP is a standalone ZIM product.
   The carrier offers two services via the Suez Canal, but is only a slot taker on other G6 vessels with very limited allocation.
   The proposed new string would include bigger vessels with a few thousand slots, as opposed to a few hundred, to provide much better coverage from Asia.
   It is difficult to quantify how many sweeper vessels have called the East Coast, because they are not widely advertised by ocean carriers. Sources at the TPM Conference in early March told American Shipper that there were as many as 15 to 20 more filler vessels moving cargo through the Panama and Suez canals to the East Coast. 
   Richard Larrabee, director of the Port Commerce Department of the Port Authority of New York and New Jersey, said at TPM that between January and the end of March the port would receive at least 12 extra-loader vessels, and possibly more through May. The ZIM Tianjin first stopped at the port, where it offloaded about 2,200 boxes at Global Container Terminal Bayonne in New Jersey, before heading to Savannah, GCT spokeswoman Louanne Wong confirmed.
   Ports such as Savannah, Charleston, Norfolk, and New York/New Jersey are experiencing significant cargo growth while volumes so far this year are sharply down on the West Coast.
   But Curtis Foltz, executive director of the Georgia Ports Authority, said there is no way to separate whether the increase in containers has been due to filler vessels, capacity upgrades on existing services, or new carrier alliances such as the 2M vessel-sharing agreement between Maersk Line and Mediterranean Shipping Co. Large-scale alliances and VSAs are designed to generate greater economies of scale, while increasing port coverage and frequency.
   “The East Coast is seeing a lot of additional volume and that volume is coming in the form of bigger ships, some new deployments by alliances and some incremental one-off vessels to help meet the peak building up in Asia,” he said.
   The container surge, Foltz suggested, could begin to moderate to more normal growth by mid-April and only time will tell if shippers will go beyond temporary rerouting.
   “We are servicing some new clients through the port and believe they are pleased. How much stays on the East Coast depends on how much capacity is deployed by carriers, the rates charged, and how quickly the West Coast gets back to its operating efficiencies,” Foltz said. “So it’s premature to say if the diversion is permanent.”
    Monthly volumes at the Port of Savannah are about three-times the forecast growth of 4 percent to 5 percent for the fiscal year, which runs from July to June. The Georgia Ports Authority reported box volumes jumped 14.2 percent in February to 284,037 TEUs. In January, the fourth largest container port in the United States handled 13.3 percent more cargo than the same month last year. Container volume spiked 18 percent in December and grew between 11.5 percent and 13.6 percent each month from September through November.
   Foltz predicted Savannah will exceed 14 percent year-over-year growth in March, and that the major East Coast ports will have record volumes.
   Savannah did not face any productivity challenges from the unanticipated cargo earlier this year, the port director said. Savannah benefits from having a massive single terminal (1,200 acres) with all chassis, rail, equipment and labor resources concentrated in one area, and years of extensive capital investment that enable efficient operations.

This article was published in the May 2015 issue of American Shipper.