Tuesday , 28 June 2016
Latest News
Drewry predicts more big ships and overcapacity on US West Coast
The Port of Oakland will regularly handle megaships from May

Drewry predicts more big ships and overcapacity on US West Coast

Analyst Drewry has warned that more carriers may follow CMA CGM in sending mega-ships to the US West Coast.

Following two trial runs with the 18,000 teu CMA CGM Benjamin Franklin, the carrier announced that, from May 2016, it will regularly deploy six ships of nearly 18,000 teu on the trade between Asia, Long Beach and Oakland.

In a statement released on March 14, Drewry said: “More carriers may follow CMA CGM’s lead and cascade big ships into the Transpacific, but they risk harming the utilisation and freight rates unless they drastically reduce the number of services.”

The statement continued: “If they do make the move, carriers will also have to accept their primary assets will spend more time at port and will therefore be less financially productive, at least until the US West Coast has fully got up to speed.”

The temptation to deploy mega-ships on the Transpacific route is driven, according to Drewry, by the fact that Asia-North Europe trade is saturated by big ships and many carriers have orderbooks filled with more big ships.

CMA CGM said that its move will help to accelerate its growth in the Transpacific, which it described as the most “dynamic” moment. Drewry replied that “[this] statement has a whiff of spin about it as the size of ships deployed has no influence on cargo demand.”

Drewry also cast doubt on whether US ports can efficiently handle these ships, if they are near to capacity.

On its trial visit to California, the CMA CGM Benjamin Franklin spent six days at Long Beach, four days at Oakland and three days at Los Angeles. The ship spent around 18% of its time at five calls in the USA compared with just 11% at nine calls in Asia.

On the other hand, Drewry said: “Because a very high proportion of the cargo is discharged at Los Angeles, Long Beach those ports will inevitably have a longer turnaround time

than elsewhere – having knowledge of the container exchange would make for a truly meaningful comparison – but nonetheless it does seem to be disproportionately long.”