Spreading the wealth
Panama Canal's expansion expected to boost transshipment.
By Chris Dupin
The growth of the Panama Canal and transshipment will go hand-in-hand, said speakers at a Jan. 26 conference in Tampa, Fla., co-sponsored by the U.S. Maritime Administration and the American Association of Port Authorities.
Load centering is necessary to bring balance to trade flows. It allows the use of larger ships with their attendant economies of scale, and reduces the need for unnecessary investment in all ports wanting to participate in the container trade, said Richard Wainio, executive director of the Port of Tampa.
'You can spread the wealth by allowing more ports to be players, and if done right reduce costs to consumers and not materially impact time and quality of service and be increasingly important connecting the U.S. and the rest of the world,' he said.
Ward Chaplin, logistics manager for Southern Wine and Spirits of America, said his company does not object to using services that transship cargo, but said it is essential that shippers have good visibility so that they know their cargo has been successfully transferred from one ship to another.
Robert West, a principal in trade and transportation at the consulting firm Halcrow, noted that because of the growing size of ships, 30 percent of containerships will account for 64 percent of capacity by 2012.
He said there are many ports vying to be transshipment hubs on the islands of the Caribbean or surrounding mainland of Central and South America. These include Freeport in the Bahamas; Kingston, Jamaica; Rio Haina and Caucedo in the Dominican Republic; Cartagena, Colombia; Manzanillo and Colon, Panama; Puerto Cabello, Venezuela; Port of Spain, Trinidad; and San Juan, Puerto Rico.
West said use of transshipment hubs in the Caribbean would give carriers using the Panama Canal the ability to load cargo bound for or originating in multiple destinations ' ports in South and Central America, as well as the U.S. Gulf and East coasts.
'For the shipping line this is a great advantage because it allows it to gather more quickly and easily cargo needed to get to his breakeven point,' he said.
But West said several of these ports are unlikely to become major hubs. These include Puerto Cabello, where a terminal that had been run by DP World has been taken over by the Venezuelan government, and Rio Haina because of insufficient investment.
He judges Port of Spain as being too far east from the main shipping routes to North America to be widely used as a transshipment hub, but allowed it might be used for cargo moving to and from Brazil and Europe.
He also said that in Puerto Rico, neither San Juan on the north side of the island, nor the new Port of the Americas terminal in Ponce on the south side, have the ability to be widely used as a transshipment hub because of the higher cost of Jones Act shipping. Cargo moving between Puerto Rico and the U.S. mainland must move in U.S.-built ships crewed by Americans, which increases costs.
But Rhonda M. Castillo Gammill, executive director of Port Authority of the Americas, said the government hopes to make Ponce an attractive destination for carriers by surrounding the port with manufacturing, logistics and other trade-related businesses.
The port, which recently received delivery of its first two container cranes, is negotiating a contract with Korea Express Busan Container Terminal to operate the facility.
West said one country that is not yet a major transshipment hub, but could become one, is Cuba.