panama canal expansion impact on traffic and transshipment asaf ashar national ports & waterways...
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Panama Canal Expansion Impact on Traffic and Transshipment
Asaf AsharNational Ports & Waterways Initiative, USA
Independent Consultant
TOC Americas 2015
www.asafashar.com
“Traditional” T/S Forecast Model
• T/S = Regional Traffic x T/S Incidence• Agree: Regional Traffic = f(Regional GDP)
No/Slow Growth • But Assume: T/S Incidence = f(Ship Size, Port
Constraints, Alliances) Dramatic Growth • Because Larger Ships Fewer Services, Less
Direct Call, Port Constraints; Alliances Market Power to “Abandon” Ports
• So why T/S Incidence Worldwide is “Stuck” at 30%?
Actual Effect of Ship Size & Alliancing• Direct Calls to More Regions (Baltic) and More
Ports (Baltimore: Evergreen brings CKYH lines; MSC brings Maersk; G6 to follow? 2M: 799 1,036 port-pairs)
• Direct Calls at Adjacent Ports (Charleston + Savanna; Norfolk + Baltimore)
• Port Constraints? 9,300-TEU already in 42-ft Savanna; Near-Future deepening of US ports, Moin, Mariel, Veracruz…
• Forecast based on “Incidence” is too general! Need detailed analysis of Service Patterns
• My analysis focuses on Additional Traffic and T/S
Main Regional Service PatternsCross-Canal Services (“Horizontal”)
Asia / ECNAAsia / GCNA
Cross-Canal Services (“Diagonal”)
WCSA / Europe WCSA / ECNA
Non-Canal Services (“Vertical”)
ECSA / ECNAECSA / GCNAAsia / WCSA “L”
Asia / WCSA ”L”
Ashar 2015
Consolidation:ParallelIntersectionGlobal
Parallel: AWP Consolidation (CKYHE)
4,400 + 4,500 = 8,900 TEU 4,300 + 4,250 = 8,550 TEU
AWH: 10 x 4,400 TEU AWC: 9 x 4,500 TEU AWY: 8 x 4,250 TEU AWS: 9 x 4,300 TEU
Hanjin, Ashar 2015
Canal Traffic: Transshipment:
“Abandon” Ports (Wilmington, Boston)? Add Ships (11), Speed (20k)? Add Ports (Halifax, Miami, NOLA, Jax, Mobile, Cartagena)?
24 Asia/N Am = 17 USWC+ 6 AWP + 2 AWS; 3 CCT Stops4-5
1
Parallel: Eurosal Consolidation (HPL/CMA/HSD)
3,700 + 4,200 = 7,900 TEU
7,900 + 2,500 = 10,400 TEU
Hapag Lloyd, Ashar 2015
SW1: 10 x 4,200 TEU SW2: 8 x 3,700 TEU SW3: 6 x 2,500 TEU
Canal Traffic:Transshipment:
“Abandon” Ports (Guayaquil, Paita)? Hubs in Panama or WCSA?
Intersection: Asia/ECNA + Asia/WCSA
• Massive T/S; but• Add Time to Asia/Mexico
and Asia/WCSA• Different Line Groupings• Limited/No Scale
Economies• Balancing Flows Difficult• High Reefer Content
Asia / WCSA
Asia / ECNA
• Limited Prospects
Canal Traffic: Transshipment:
Feeder
Intersection & Global ConsolidationCross-Canal Services (“Horizontal”)
Asia / ECNAAsia / GCNA
Cross-Canal Services (“Diagonal”)
WCSA / Europe WCSA / ECNA
Non-Canal Services (“Vertical”)
ECSA / ECNAECSA / GCNAAsia / WCSA (“L”)
Asia / WCSA ”L”
Canal Traffic:Transshipment:
Hapag Lloyd, Ashar 2015
Fourth Revolution
Summary Observations• Regional GDP (Venezuela; Ecuador) – No Change T/S• Parallel Consolidation -- Modest Growth T/S– AWP Diverts AWS/IM: Traffic UP; T/S No Change– Diagonal Services: Traffic No Change; T/S Up; WCSA Hubs?
• Intersection Consolidation -- Massive Growth T/S -- Long-Term (if ever)
• Special Factors– Alliance Concentration (2M/Moin; O3/Kingston) – Add/Eliminate Direct Calls (Cartagena, Houston, Veracruz,
Moin, Mariel)– Add/Eliminate Specialized Services (CKHYE AWT; CMA PEX2)
Contrarian Views
• “Double digit jump in Panama transshipment activity as a result of the opening of the expanded canal in 2016” (Drewry)
• “(Expansion) will boost the need and demand for transshipment and create opportunities for existing Caribbean hubs and the development of new ones” (World Bank)
• “Growth in transshipment is inevitable, competition will be tough, Panama is key, Go for it” (Worley Parsons)
• “(Expansion) increases Panama Canal’s traffic by 15-20% due to recovering Asia/N America trade, but will only result in small growth (5%) in regional transshipment“ (Ashar)
Thank You!Asaf Ashar
National Ports & Waterways Initiative, USAIndependent Consultant
TOC Americas 2015
www.asafashar.com