b'JANUARY 23 - FEBRUARY 20, 2023SUPPLY CHAIN FORECASTS 9Jensen says container trade recovery could be delayed until 2024By Stas Margaronis AJOTThe hopeful projections for recovery in cargothe economy pick up over the summer. There volumes in 2023 may be overshadowed by thewill be a surge of cargo during the normal peak more pessimistic projection of delayed recoveryseason and the market will rectify.which may only manifest itself inHowever,Jensenbelieves 2024, according to Lars Jensen,the more pessimistic outcome PrincipalatVespucciMaritimeis more likely: The pessimis-based in Copenhagen, Denmark. tic scenario is somewhat easier Jensen was speaking to thetoswallow.Inthatscenario, Propeller Club of Northern Cal- the Russian war does not end ifornia (PCNC) on January 17thanytime soon, it takes inflation Port equipment, such as tug boats, are long-term, capital-intensivein which he said that the recov- a lot longer to get under con-investments with replacement based on end-of-service life estimations. ery in ocean shipping volumestrol, and the current recession (ROADcontinued fromheavydutypiecesofequip- may have to wait until 2024. mightbedeeperandlonger page 8) ment that can only be sourcedJensen explained the opti- than we expect. In which case, quickly will limit the ROI ofinpartorwhole,outsideofmisticscenario:Thehappyit will take consumer sentiment existing equipment that is stilltheU.S.,whichcanmakeand optimistic scenario is thata lot longer to come back. In usable.Portequipmentarethatequipmentineligibleforthis is only an inventory correc- which case, the boom that we long-term,capital-intensivetheprogram.Inthosecases,tion. The global recession thatLars Jensen, Vespucci Maritime get in cargo demand following investments with replacementwaiversorothermeansofwere in right now is short andtheinventorycorrectionwill basedonend-of-servicelifeaccommodationshouldbeshallow. The Russian war ends, inflation getsnot happen until the first quarter of 2024. estimations. MTOs will need(ROADcontinued onunder control, and consumers get happy andJensen said that the core driver of the massive to adapt projects to accommo- page 14) optimistic. If that is the case, then we will see(DELAYEDcontinued on page 11)date the future integration of zero-emissionandnear-zero-emission technologies.Further, timelines to replace equipmentareunrealistic giventheamountofequip-menttoreplaceandassoci-atedcosts.Forexample,an MTOcanhave100diesel tractorsonsite.Thesetrac-torstypicallycostapprox. $150,000. An electric tractor costsapproximatelyfourto five times as much as a diesel tractor,roughly$600,000 including the charging infra-structure.Certainpiecesof zero-emission cargo handling equipmentarealsonotan equal replacement for diesel counterpartsduetobattery life and ability to work a full shift on a single charge. With-outassurancesofadequate deliverytimeframes,most manufacturerswillchoose nottomaketheneeded investmenttosignificantly increaseelectricequipment productionandmeetman-dated timeframes. C hallengen o . 2: Z ero -eMiSSione quipMentM anufaCturingReplacingcargohandling equipmentwithzero-or near-zero-emissionsolutions isnotastraightforwardor immediate proposition. Time-lines for replacement are also significant.Currently,wait timesforzero-ornear-zero container handlers are nearly two years. Small ports will be disadvantaged by these wait times as big ports have estab-lished relationships with man-ufacturers and more financial resourcestoaccommodate longer lead times. MTOs are investing money in domestic equipment manu-facturing.Thesemanufactur-ers,partneredwithcurrent domestic battery suppliers, are alreadybuildingspecialized electricterminalequipment, creatingtensofthousands ofjobsacrossthecountry. However,therearemany'