Fairview container port gains mention in International business article

The folks in the container business are bullish about the future, below is an interesting article from e-Cargonews Asia about the expected improving business climate for containers over the next couple of years. They throw in the usual potential problems of a recession and spikes in fuel prices, but on the whole its expected that the business will be strong through until 2009, possibly going soft then and rebounding further on into the next decade.

Longer term, it seems that a number of factors could impact the container business around the world, the widening of the Panama Canal is expected to drain some business from the American West coast ports, which apparently have a rather disruptive reputation.

Likewise, containerization plans in Mexico and our very own Rupert port may also bleed away a fair hunk of business from the West coast ports, Seattle and Tacoma are said to be vulnerable to a port in Prince Rupert according to the article.

Makes for interesting reading, as everyone scrambles to try and become the gateway to Asia.

Boom in box leasing ahead of peak season
By Patrick Burnson
San Francisco

Container leasing companies are sounding a bullish call now that the peak shipping season is on the horizon. And for a good reason. "For the past few years, we have experienced unprecedented growth on the transpacific route,'' said Dennis Bohm, US West Coast marketing manager for Florens Container Services, the third largest container lessor in the world, with an estimated fleet of 1.2 million TEUs under its management. "We have not only experienced solid growth in container leasing but we also continue to enjoy very high equipment utilisation rates, presently exceeding 90 percent.''

According to Bohm, this is due to a number of important factors:

*The traditional "peak shipping'' season continues the trend to be spread out through the year, keeping container demand constant and stable. This has softened the old trade seasonal "peaks and valleys'' that would result in periodic container surpluses in major ports.

* Growth in the transpacific trades from Asia to North and South America continues at five to six percent per annum, adding to new container demand

* Rising steel prices and other factors have driven up the prices for new containers. This has lead many carriers to look to the leasing market for their equipment requirements rather than purchase.

* An on-going trend for new leases to be written for longer terms. This has also contributed to higher utilisation rates.

* Increased all-water services from Asia to the US East Coast and Gulf has tempered congestion at West Coast ports and reduced container surpluses at inland intermodal hubs. This has also contributed to better utilisation rates. "We are now projecting growth to continue with solid performance through 2007-2008,'' said Bohm. "In 2009, some predict a softening effect in the market due to possible over-capacity but that should only be a temporary slowdown."

Other issues that could temper growth, said analysts, would be any new or unforeseen spikes in fuel costs or if the US market heads into recession in 2007 or 2008.

Florens provides a wide variety of marine container equipment for use by the shipping industry. "Our customers represent practically every container shipping line in the world, with whom we continue to gain market share every year as our fleet expansion continues, said Bohm. That expansion may be even more far-flung, however, if shippers opt for more creative distribution strategies. Having been burned in the past by labour disruptions and port congestion on the US West Coast, analysts predict that boxes from Asia will arrive at their destination via alternate routes in the coming years.

Both Canada and Mexico are wooing shipping lines away from the States with promises of more terminal space and quicker intermodal turnaround. The Port of Prince Rupert, for example, is competing aggressively with Seattle and Tacoma by building facilities to accommodate surging inbound calls from Asia. Maher Terminals, the largest terminal operator in the Port of New York/New Jersey, has been charged with completing the project by the end of the year.

At the same time, Hutchinson Whampoa is building a new container facility in Port of Lazaro Cardenas, which is competing with southern California gateways for Asian goods. The port is served by the Kansas City Southern Railroad with links to the US midwest.

A P Moller-Maersk, meanwhile, is building a mega terminal at the East Coast port of Norfolk, Virginia. Norfolk, too, has an extensive rail and surface road network serving the midwest. According to analysts, the shipping giant is banking on a wider Panama Canal in future years to expand its all-water deployment and become less dependent on US West Coast access.

Panama's President Martin Torrijos and the Calument Council of Panama approved the proposal to expand the canal in June, sending it to the National Assembly. The assembly unanimously approved the proposal in July mandating a national referendum to be held on October 22. Pending approval by Panamanian voters, the expansion would double the waterway's capacity and allow more traffic by creating a new lane and the construction of a new set of locks. The project is expected to take 10 years.

At the same time, scores of US "niche'' ports on the East Coast and US Gulf are also planning facility expansions to handle expected increases in Asian traffic.