By Matt Tomsic
mtomsic@scbiznews.com
Published March 5, 2013

LONG BEACH, Calif. — Larger ships are expected to call on the East Coast for several reasons — including the Panama Canal expansion — but some companies are concerned about East Coast ports’ abilities to handle those larger ships, panelists said during an international maritime conference.

Peter Tang-Jensen, senior vice president of ABS, said ship sizes have tripled since 2000. Carriers introduced the first post-Panamax ships in 2000, and those ships carried 6,000 20-foot equivalent units, or TEUs, a common industry measurement. In 2013, carriers are expected to add “ultra-large” ships, capable of carrying 18,000 TEUs. His remarks came during TPM 2013, an international maritime conference organized by the Journal of Commerce.

Soren Skou, CEO of Maersk Line, said the largest ships will be deployed to the Asia-Europe trade routes, and those deployments could cause a cascading effect that increases the size of ships calling on other ports as ocean carriers take larger ships that were on Asia-Europe routes and deploy them elsewhere.

Skou also highlighted another trend that’s sending larger ships to the East Coast. In 2008, he said, 90% of ships calling on East Coast ports traveled through the Panama Canal. In 2013, that figure fell to 60%, while the remaining 40% traveled to the East Coast through the Suez Canal, a deeper channel that allows for larger vessels.

“This trend is going to continue,” Skou said. “We can’t figure out how to make a profitable service from Asia to the U.S. East Coast via the Panama Canal.”

The Panama Canal, meanwhile, is expanding its locks to allow larger ships to pass through, and that project is expected to be completed in 2015. It’s also expected to open the East Coast to larger ships, but some companies are concerned about the larger ships’ ability to enter East Coast ports.

“As the canal opens in a couple of years, there’s some serious problems on the East Coast in terms of the ability of several of the eastern ports to handle the large ships,” said Rick Smith, vice president of global transportation for Sears Holdings.

During his presentation, Smith cited draft depths in Savannah and New York, asking if big ships will be able to get into those ports, even though Savannah, and others, are deepening their harbors in anticipation of larger ships calling on their ports.

The Georgia Ports Authority is deepening its harbor to 48 feet from its current depth of 42 feet, but the project faces legal challenges.

In Charleston, the S.C. State Ports Authority is also in the process of deepening its harbor, and the Army Corps of Engineers has begun to study the effects of deepening the harbor. It has chosen vessels with drafts of 48 feet and 50 feet to simulate changes to the harbor as part of the deepening project. Charleston Harbor’s current depth is 45 feet, and the harbor can handle ships with deeper drafts only during high tide.

The Army Corps Charleston District also has expedited the timeline to complete the study, which must be completed before the corps can consider deepening the harbor. But Lt. Col. Ed Chamberlayne, commander of the Charleston District, said the project could be delayed because of civilian employee furloughs required by sequestration, a set of automatic spending cuts enacted by Congress that went into effect Friday.

For live updates throughout the conference, follow @MattToms on Twitter.

Previous coverage

International maritime conference begins
Sequestration could impact harbor deepening, other federal operations