Megaships are Coming: Are U.S. Ports Ready?

As the shipping industry consolidates to address the challenge of keeping costs in check, busy ports like Los Angeles are seeing an influx of traffic by way of megaships–some as long as the Empire State Building is tall, and capable of carrying twice as much as the largest ships currently operating.

While these giant ships mean higher container volumes and fewer trips, they also present challenges to those existing ports that not designed for vessels of their size.

“Upping the Ante”

Ships like the 1,300-foot-long Benjamin Franklin, owned by French shipping line CMA CGM SA, represent what could be the future of higher capacity vessels. As the largest container vessel ever to dock at a U.S. port, unloading the maximum of 18,000 20-foot equivalent units carried by the ship has put a strain on the capacity of even the most high-volume ports.

“Everything has been built around what the status quo is now, and you’re upping the ante here,” said Jim Blaeser, a maritime analyst at global consulting firm AlixPartners, referring to the $150 million ships.

Larger Ships, Reduced Costs

Marc Bourdon, president of CMA CGM America, claims that the larger ships are a necessity to combat the pressure to drive costs down. The ships have previously been successful in ports in Asia and Europe, where deeper channels and larger cranes are more readily available than in U.S. ports.

“If you’re looking at the L.A.-Long Beach port complex, there’s enough cargo to justify this vessel,” said Bourdon of the Benjamin Franklin. “But the infrastructure has not been up to the job.”

Multiple Port Stops

The megaships are being touted as a way to strengthen transpacific trade routes between Asia and the United States. Currently, the ports of Los Angeles, Long Beach and Oakland, as well as the ports of Seattle and Tacoma are considered capable of handling the massive vessels.

To prepare for the Benjamin Franklin, which arrived filled to 80 percent capacity, officials at the port spent weeks coordinating ways to ensure the nearly 11,200 containers were unloaded as quickly as possible and offered the least amount of disruption. This remarkable amount of lead time proved beneficial, according to Gene Seroka, executive director of the Port of Los Angeles.

“We had a real good view of how much cargo was going to go on the rail and how much on the dock,” Seroka said. “We don’t always have that.”

“A Jigsaw Puzzle”

While these massive ships pose challenges to the ports, the increased capacity creates its own challenges for shippers as well. With multiple shipping lines packing massive volumes onboard a single ship, the tasks of loading, sorting and unloading require more planning and calculations to ensure seamless operations.

“It’s like a jigsaw puzzle,” said Bobby Olvera Jr., president of the San Pedro Bay chapter of the International Longshore and Warehouse Union. “You’re seeing larger ships, and you’re also seeing more combinations of cargo on those ships.”

While port officials may be temporarily scratching their heads at how to deal with the logistical challenges posed by the megaships, the changes required to accommodate the larger vessels have already begun.

Expanding infrastructure and increased emphasis on organizational efforts, according to Paul Bingham, a trade economist with Economic Development Research Group Inc., implies that the larger ships are here to stay.

“There’s a lot of signaling going on here,” Bingham said. “But now they’ll be able to say, with some credibility, that a vessel of this size can come to U.S. ports. It’s not just hypothetical anymore.”

If you need a partner to help you strategically manage and successfully move your products out of the port and onto their final destination, be sure to download our latest eBook — Speeding Time-To-Shelf and Cutting Costs — a must read for today’s logistics professionals.