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Sunday, May 31, 2020

Maritime Logistics Professional

Fuel Consumption Stirs up the Canal Debate

Posted to Martin Rushmere (by on September 30, 2010

Curious and Different Claims Muddy the Outlook

Different assessments over the Panama Canal effect are sloshing around like bilge water, dirtying the economic and technical impact on the East Coast.
The most noteworthy prediction comes from Jim Brennan of logistics and maritime consultancy Norbridge, who reckons that vessel drafts will hardly change after 2014 because so much fuel will be burnt in the canal that vessels will become much lighter. Brennan says that ports will not have to deepen beyond 48 feet – as ships with a draft of 50 feet will displace (my interpretation) the same as those of 48 feet.
This is such an unusual argument that more details need to be forthcoming about the reasoning before definite opinions can be made. However, one question that comes to mind is how Mr. Brennan sees the differences in fuel efficiency, as well as hull design, between the 6-8,000 TEU post-Panamax ships and those using the canal today. The last time I checked, no similar claim had been made about earlier generations of ships. (Possibly, he is factoring in stops in Caribbean ports.)
Apart from the technical aspects, political and technological considerations need to be taken into account. As Joseph O'Keefe so forcefully shows, Congress is extremely shortsighted and miserly over port dredging funds. Ports must take every cent they are offered now; otherwise they will be cut dead. It is a law of public finance that if public money is refused for a project, less will be forthcoming the next time. (Which is why departments make sure they use all of their budget allocation each year.) Congress is not interested in using money efficiently, only in its public image being portrayed in the best light possible.
Added to this is the pace of technological change. It is likely that by the time the widened canal is open for business, engine and hull design will have changed dramatically – so much so that their fuel efficiency will be much better than today.
Uncertainty over this question is matched by that over the effect on East Coast ports. In the past week, one report has said that New York/New Jersey could gain by as much as 4 million TEU a year, while another reckons there might be a disappointment. One industry executive also says that imports from China are likely to slow and there will be less traffic overall.
Industry wisdom is firmly on the side of ports deepening to 50 feet and not worrying about fewer imports from China.