Cuba has potential to have the best port to switch Panama Canal traffic
The saga of the rivalry between East and West Coast ports has taken a new twist with transshipment and transloading catching the eye of the ever-bewildered container worlds. These two methods have combined to throw in an extra factor into the search for a formula for the ideal route from Asia.
Panama Canal execs say the expansion project due for completion in 2014 will allow the canal to handle 12,600 teu vessels, (Robert West of Halcrow says that 30 percent of container ships will account for 64 percent of world capacity by 2012), whereas most East Coast ports can only cope with a maximum of 7,000 teus.
This means transshipment -- shifting the boxes to smaller vessels. Shipping lines are eyeing the Caribbean as the most likely area of cross over.
A whole slew of ports are being looked at. One of the big favorites – drum roll here -- is Cuba, which could be the most logical and cheapest cross over. This factor could make the political debate about the embargo of the island much more fervent – particularly because China is climbing in wholesale with investments and aid projects.
An American port is also being looked at, in Puerto Rico (Ponce or San Juan). But the Jones Act bedevils matters – US ships and crews mean that costs will most likely increase.
Some ports will be out of the running. Robert West says these include Venezuela's Puerto Cabello, where a terminal that had been run by DP World has been taken over by the Venezuelan government, while there has not been insufficient investment in Rio Haina.
He says Port of Spain is too far east of the main routes to North America.
Meanwhile, on the Asia to West Coast route, the talk is all about transloading in the reverse direction – shoving the contents of a 40 footer into a 53 footer—because of obvious cost benefits.
Both methods have their drawbacks. Security for transshipment increases, with extra costs for jacking up the facilities in the Caribbean and complying with 10 + 2, Secure Ports and the rest of it. Logistics for transloading becomes a headache, with contents having to be meticulously planned at the point of origin to avoid time wasting in the US as goods are shuffled around.
What is certain is that a new sub-sector of the maritime industry is springing up – 3PLs and container lines that are specialists in the whole "trans" operation.
The industry could in essence be getting an unexpected and friendly kick in the pants that will lead to more jobs and capital investment.