I read a really good book recently, on the evolution of container shipping: The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, by Marc Levinson. It’s a great book. Anyone interested in understanding the Port of Tacoma and/or the shipping business should read it.
One of the things that struck me was how quickly the shipping world transitioned from “breakbulk” cargo to containers. Breakbulk was where everything was all shipped individually, or more recently, on pallets. It’s the same basic system that’s been used for hundreds of years. A breakbulk ship might take a week or more to unload, as everything was taken off piece by piece. But put the same amount of cargo in containers and the ship could be unloaded in just hours. The cost savings from containerization were enormous. In the mid-50’s, the world was breakbulk; by the start of the 70’s, container shipping was big business.
It wasn’t an easy transition at all; the push to containerize was very contentious with many, diverse elements of the industry including the unions fighting it. The ports as a whole were very skeptical – transitioning to working containers was quite an expensive proposition because of the specialized equipment necessary.
A few forward-looking ports including Tacoma decided to take the plunge, investing heavily in container cranes and handling equipment. Many other ports did not, believing breakbulk would prevail.
Looking back to that period, a good case in point is San Francisco. In the late 50’s, San Francisco port officials ignored Matson’s request for a separate container terminal. The city’s port director thought container shipping was a passing fad and wouldn’t move to accommodate them, even though they’d been calling there with breakbulk for years.
Across the bay, the Port of Oakland leaders were more accommodating to Matson, and in 1959 the world’s first land-based container crane was built there, in Alameda.
Well we all know how the story turned out – although there were also other factors at play there that all conspired to drive the shipping business to Oakland.
Basically, the ports that staked their future to breakbulk and didn’t modernize were largely passed by and relegated to the backwater.
The ports that did spend money on modernizing were the ports that ended up with all the business, and they’re mostly the ones that are thriving today.
I believe we’re on the verge of a similar period of potentially disruptive change right now. I can’t help but think the current trend towards the mega-ships – the 18,000+ TEU ships– is going to be every bit as game changing as the initial move to containerization. (FYI – TEU = Twenty-Foot Equivalent Units – the measure of container ship capacity).
The ships that currently call in Tacoma are mostly in the 6,000-8,000 TEU range, although we have had 10,000 TEU ships. This is about the largest sized ship we can currently accommodate. The facilities we have cannot service larger ships: our cranes are too mostly too old, too small and don’t have sufficient reach. Plus the container yards themselves and the related infrastructure are inadequate. One of the 18,000 TEU mega-ships can generate 10,000+ moves in one 3-4 day visit and it takes huge yards with huge amounts of equipment to deal with such a surge without choking.
The 18,000 TEU CMA CGM Benjamin Franklin has already called in LA and Oakland – and even once in Seattle When it was worked in LA, they used 9 cranes all at the same time. We don’t even have a dock with that many cranes here, much less the super-post-Panamax cranes necessary for the mega-ships.
We’re lucky in Tacoma: the prevailing wisdom is that mega-ships will come to the West Coast later rather than earlier, so maybe we have a little extra time to prepare.
Port Metro Vancouver has jumped on the bandwagon and is making preparations in a big way. They’ve proposed to more than double the size of their Deltaport with the new 266 acre Roberts Bank Terminal 2. When completed, it would provide an additional 2.4 million TEU annual capacity. The terminal is currently in the environmental impact assessment stage which will complete in 2017. Construction is slated to begin in 2018 and will take approximately 5 1/2 years to complete. Here’s a very interesting summary report on the project: Roberts Bank Terminal 2 – Project Rationale
According to a report prepared for Port Metro Vancouver which they’ve used to justify the project:
“…Vancouver is considered to have a better competitive position than its immediate competitors – Prince Rupert, Seattle, and Tacoma – based on a review of the following criteria:
- Physical capability of the terminals;
- Planned development of capacity;
- Productivity of the terminals;
- Cost of transiting the terminals;
- Delivered costs to Central Canada and the US Midwest;
- Intermodal capacity;
- Import/export balances;
- Suitability as a regional hub; and
- Existing customer base.
Here’s a link to the full report: Container Traffic Forecast Study – Port Metro Vancouver, June 2014 It’s some very interesting reading.
Farther north, Prince Rupert also has a major, $200 million expansion project already underway, scheduled for completion in 2017. See Fairview Container Terminal Expansion Project and Fairview Container Terminal – Phase II A North Expansion. This project will extend the dock to 800 meters, add as many as 5 new super-post-Panamax cranes and expand the terminal space and increase the capacity to an estimated 1.2 million TEUs annually.
And even though they haven’t completed this expansion, the terminal operator, Dubai Ports World is already considering a further expansion to push the capacity to more than 2 million TEUs.
Where do you suppose these Canadian ports figure to get all that new extra business from, anyway?
Is Tacoma going to be ready when the shipping lines begin to deploy the big ships regularly?