WCA September 2014

From the Americas

It is also possible, she wrote, that railroads moving goods from West Coast ports could lower their fees to make it more economical for ships to avoid the Panama Canal route. John Martin, who works as an economic consultant for several ports, told her: “The uncertainty as to what’s going to happen with rates is huge.” Other concerns for the American port cities originate farther from home. Ocean routes could shift as Asian manufacturing continues to move from China to countries to the south, like Singapore and Vietnam, which are closer by sea to US East Coast ports through the Suez Canal than to West Coast ports across the Pacific.  A new competitive threat has emerged 500 miles north of the US border with Canada. Tacoma and Seattle are losing market share to the Port of Prince Rupert in British Columbia: just six years old and already doing brisk business with goods headed for the Midwest United States, noted Ms Searcey. “For trade with China, Prince Rupert’s appeal is proximity,” she wrote. It requires two to three fewer days at sea from China than the US Pacific ports. And analysts told the Times that Canadian railroads are offering bargain rates to ship goods from Prince Rupert to cities in the US Midwest. Moreover, cargo carriers debarking in Canada can avoid taxes imposed by Washington.  In the spirit of the common enterprise – unity and strength in the face of competition from Canada and elsewhere – Tacoma and Seattle have forged a new alliance. This year, for the first time, the two ports obtained permission from the Federal Maritime Commission to share information on operations and rates. They are coordinating lobbying tactics as well as construction projects to prevent duplication of effort, officials said, and are researching other ways to cooperate. “In the past 60 years we’ve truly been cutthroat,” Stephanie Bowman, a commissioner for the Port of Seattle, told the Times ’s Dionne Searcey. “[But now] we’ve been able to work together and put aside our historical competition.”  According to the Michigan Public Service Commission, the cost of producing wind energy in the state was down from more than $100 a megawatt hour in 2009 to as little as $50 per MWh in 2012, making it about half as expensive than originally projected by utility companies. Wind is now the primary source of new renewable energy in Michigan, home to some 120 companies that supply wind components and employ 4,000 people. A state law that requires 10 per cent of electricity produced to come from renewable sources by the end Energy

The Panama Canal Expansion Trade-dependent port cities along the US Pacific Coast brace for a future of big cargo ships and an improved route to the Atlantic “As construction crews 5,000 miles away are working to widen the Panama Canal to allow much larger ships to sail straight to the East Coast, this historic port city and others along the West Coast are doing everything they can to avoid becoming superfluous.” Dionne Searcey of the New York Times was reporting from Tacoma, Washington, a port whose officials know that that by the time the “new” Panama Canal opens in 2016, plying the oceans will be a fleet of cargo ships so big they will not be able to squeeze through even the wider channel. Determined to retain their rich import business, Tacoma, Seattle and other West Coast ports are spending billions to be ready to accommodate the ships and keep themselves competitive in the rivalry for foreign trade. (“West Coast Ports Scramble to Keep Big Cargo Vessels,” 27 th June) Standing among the jagged rebar and broken concrete of a $22 million renovation to shore up the port’s Pier 3, the senior project manager for the Port of Tacoma, Trevor Thornsley, told the Times : “The ships continue to get bigger, the cranes need to get bigger, and the docks need to be able to handle them.” Ms Searcey wrote that the work going forward in Tacoma, which “likes to call itself the most trade-dependent city in the nation,” is among dozens of projects under way across the US in response to major changes in the world of container imports from Asia. “Everybody in the supply chain from the manufacturer to the end consumer – that entire supply chain is changing,” Tay Yoshitani, chief executive of the Port of Seattle, told her. “The port industry is trying to make adjustments.” Seattle had already spent $1.2 billion through 2012 to upgrade its port facilities, and an additional outlay of $5 million to upgrade Terminal 5 has been approved. Traditionally, America’s West Coast ports are the gateway to the rest of the country for the growing supply of goods from China and Hong Kong. The ports in Tacoma, Seattle and – in California – Oakland, Los Angeles, Long Beach, and elsewhere, offer much shorter sailing times than Gulf Coast and East Coast ports. But for shippers of some goods, Ms Searcey observed, “the web of logistics, including trucks and railroads,” is less expensive if they go through the Panama Canal. While the widened Panama Canal will allow an all-water route for big ships to the East Coast, the project – originally slated for completion this year – has been plagued with construction delays. And in June the authorities had yet to announce toll charges for passing ships. In the end, Ms Searcey pointed out, it might be too expensive for some ships to use.

BigStockPhoto.com Photographer: Aispl

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Wire & Cable ASIA – September/October 2014