News Content

Average ship size calling at US east coast to rise 25pc, but slowly

THE average size of ships serving the US east coast from Asia will increase 25 per cent, according to London's Drewry Maritime Research.

So far that only means ships in 5,900-TEU range, far short of the 13,000-14,000 TEUers expected to transit the expanded Panama Canal when it opens June 26.

At present the average size of ship from Asia to USEC via Suez is around 7,900 TEU, reports London's Port Technology.

As Drewry sees it, the Asia-USEC trade via Panama is moving towards bigger ships and fewer services, but the process may be a long one.

There will be nine weekly services using the old panamaxes ships from July, which provides plenty of scope for further upgrades but with demand for US east and Gulf coast services slowing, Drewry maintains its expectation that carriers will only do so in stages.

Aided by the west coast docker dispute at the start of 2015, container shipments from Asia to the USEC/GC surged 16 per cent in 2015, but the that ended in the first quarter, with Asia-USWC rebounding by six per cent with Asia-USEC/GC only managing a one per cent increase.

There also remain draft restrictions that prevent bigger ships from calling, one being the lack of air draft under the Bayonne Bridge in New York/New Jersey. The lifting of the bridge is expected in mid-2019.

The G6 Alliance's new NYX service will call at the Global Marine Terminal that doesn't require its 9,400-TEU ship to go under the Bayonne Bridge.

The NYX ships will represent an upgrade on the current largest vessels calling at USEC ports, with bigger units from MSC that come via Suez.

Drewry believe that another disincentive for carriers will be the shrinking freight rate differential that they are seeing for Asia-USEC services compared with Asia-USWC loops.

At the peak of the west coast slowdown spot rates for FEUs from Asia to the east coast where as much as $2,800 higher than to the west coast, according to Drewry's Container Freight Rate Insight.

Since then spot rates on both legs have come down steeply and while east coast rates remain about twice the price of those to the west coast the differential is now lower than $1,000.

Another factor that needs considering is the pending alliance restructuring that will take place in April, 2017, assuming all regulatory approvals are granted.