Presently there is a huge transformation taking place
in the global economy, driven by the Asia Pacific, and in particular,
China. This is reverberating around the world and will change the
course of international trade forever. Consider that of the Fortune
500 countries there are now 400 of them with manufacturing plants
in Shenzhen, China. Last year Chinese ports moved 88 Million TEU
(twenty-foot equivalent containers). That represented one-third
more than expected for the year. China's containerized trade is
expected to reach 140 Million TEUs by 2010. While Hong Kong's growth
levels are off, the ports of Shenzen and Shanghai are expanding
at an incredible rate.
China's integration into the global economy means
lower prices for consumers, lower interest rates and lower inflation.
China is now consuming more than half of the world's cement, a quarter
of its steel, and the most of its raw materials. This creates opportunity
for Canada, but at the same time puts tremendous pressure on global
transportation. In 1999, Vancouver ports, primarily Vancouver and
Fraser River, handled just over 1 million TEUs and a five short
years later that volume doubled to 2 Million due to trade from China.
This shows no signs of abating and this will impact the way business
The present world containership capacity is 9 Million
TEUs representing 7,600 vessels. Another 3.8 Million TEUs or 1,000
vessels is contracted for delivery by 2009. This is an extra 42
percent increase in current capacity. China Shipping, one of the
largest carrier companies in the world, has the largest vessels
on order at 10,000 TEUs. Other carriers have suggested that they
will soon be ordering 12,000 TEU ships.
The result of this growing trade has put pressure
on all those in the logistics chain including shippers; carriers;
port terminals; longshore labour; road and rail infrastructure;
ports; and others. Billions in new investment is urgently required
to tackle the problem. This will require cooperation from all stakeholders
from both industry and governments. Many have argued that Canadian
ports are now clearly one of the biggest economic development tools
they have at their disposal. Canada must now seize the opportunities
to grow its global trade which has been Canada's strength since
the construction of the Canadian Pacific Railway and will sustain
our country well into the future.
Overall the volume of international trade has outstripped
shipping industry projections. China’s surging demand for
imports is outstripping shipping capacity. According to the Baltic
Dry Index, the rates shippers charge to transport bulk products
such as iron ore and coal have tripled since August 2002.
In the next decade, Singapore is likely to replace
London as the foremost maritime services center in the world. The
Port of Singapore Authority has benefited from strong government
support and is proving successful in attracting maritime service
providers to the island. (Maritime Digest 2004)
China is having trouble unloading and the problem
will worsen as demand for shipping continues to expand and flood
of new ships comes into service. China is expanding capacity, but
it cannot keep pace with demand, which is growing by 50 percent
per annum at some of the country’s ports.
Even Singapore, one of the most efficient ports in
the world, is suffering from congestion.
Deploying 8,000-plus-TEU ships ‘will be a challenge’.
The big ships take longer to load and discharge, and that can throw
a labour rotation off schedule. Carriers may be able to deploy the
big ships in Singapore and Asian ports, but other options are limited.
On the West Coast the ILWU does not have the productivity to handle
the large ships. If they try to discharge the larger ships the congestion
problems will be worse. (Journal of Commerce, November 2004).
170 new container ships with total capacity of 862,610
TEUs will come on the market in 2005, carriers say the continuing
demand for shipping capacity to carry Chinese trade will continue
to outstrip supply and lift freight rates for at least another year.
(Journal of Commerce, Nov 22, 2004)
“I think the key issues facing shippers today
are congestion and capacity. It’s across all modes. Congestion
and capacity issues add to everything: They add to costs, they add
to delays, customer-service failures and not having your product
on the shelf.” (Michael J. Barr, Chair, National Transportation
Industrial League Director of Global and Cross-border, Proctor &
The first four 8,000-plus TEU ships called Long Beach
in 2004 and represents the first wave of
150 to come on stream over the next three years.
Consider the impact of a large 8,000 TEU Vessel:
• Discharges 4,000 40-foot containers or 8,000 20-foot
• Leads to 2,000 Truck Moves
• Leads to 10 Double-Stack Trains Loaded with 200 Containers
stretching 20 miles
• Needs 140 acres for a terminal to work a 8,000 TEU Vessel
in a single call
As the more than 150 vessels of 8,000 TEU-plus capacity
enter the trans-Pacific and Asia-Europe trades, they will displace
Dozens of vessels of 5,000 – 6,000 TEU capacity. Many of those
Vessels will shift to services calling in the Pacific Northwest
and at East Coast ports. New York/New Jersey are preparing for larger
vessels with deepening of berths to 50 feet and installed post-Panamax
cranes able to stretch over 22 rows of containers. (Journal
of Commerce, 2004)
“There is a lot of evidence that we are
beginning to hit the wall in terms of the capacity of our transportation
system in all modes, so it’s important that we begin to think
creatively.” (Jeffrey Shane, Undersecretary, US Maritime