Speakers at CA Maritime Symposium see canal loss of business of 13,000-teu and below for ports of Long Beach & LA By Stas Margaronis, AJOT Two speakers at the California Maritime Leadership Symposium say they expect the Ports of Long Beach and Los Angeles will lose shipping as a result of the widening of the Panama Canal scheduled for completion in 2015. The symposium, which took place on February 20-21 in Sacramento, California, is a premier event for California ports and maritime businesses. Alan McCorkle, senior vice president at APM Terminals, Los Angeles said that he expects to see a loss of business to the Los Angeles/Long Beach ports coming from vessels in the 13,000-teu capacity and below. He noted that these vessels compose most of the current container ship fleet that will be able to access the widened Panama Canal. McCorkle noted that APM’s sister company, Maersk Line, is building a fleet of 18,000-teu vessels at the DSME shipyard in South Korea. The 18,000-teu ships are too big for the Panama Canal even after the 2015 widening is complete. The widened canal will only be able to accommodate up to 13,000 teu vessels. As shipping lines move to build larger vessels, the attraction of moving through the new Panama Canal will be limited. McCorkle said the 18,000 teu ships could be deployed for the Asia to California trade after LA/LB terminal upgrades, but for now will focus on the Asia to Europe trade. Michael Shaw, vice president for external affairs and legislative affairs at the California Trucking Association, was more pointed in his remarks about the potential loss of business from the Panama Canal widening. He said that the push for unionization of truck owner operators by the Port of Los Angeles was having a negative effect on truckers and shippers. He said that California state and local entities were encouraging this effort by creating an adversarial environment for the trucking industry. Unionizing owner operators would add to the cost of doing business at the Los Angeles and Long Beach ports, he said. The December strike by members of the International Longshore and Warehouse Union (ILWU), which briefly shut down the two ports, has added to shippers, carriers and truckers’ anxiety about service reliability at the two ports. Shaw said the cumulative effect of the Southern California labor situation was likely to encourage some shippers to move boxes away from the two ports once the Panama Canal widening was complete. This effect is most likely for cargoes destined for the Mid-west that can utilize rail service through Atlantic coast ports such as Savannah, Norfolk and New York. Challenging this notion is Kathryn McDermott, executive deputy director of business development for the Port of Los Angeles, who says the Port is moving decisively to address “challenges” from Atlantic coast ports, who hope to gain market share from Los Angeles and Long Beach. She said: “Investments in new infrastructure projects will maintain our lead in cargo delivery to Mid-west destinations such as Chicago.” She added that “we are not the lowest cost port and so there may be cheaper ways to deliver cargo, but not faster.” McDermott said the Port’s dock to rail connections provide for much faster delivery of containers from Southern California than from Atlantic coast ports. For example, shipping containers from Shanghai through Los Angeles to the Mid-west is much faster than going through New York even after the widening of the Panama Canal. McDermott cited the competing transit times as follows: • Shanghai-LA-Chicago = 13 days sailing+5 days rail = 18 days • Shanghai-NY-Chicago = 26 days sailing +3-4 rail = 29 days Also, McDermott sought to minimize the impact of the December ILWU strike: “There have been problems with labor as a result of the strike that shut down the port in November and early December. However, once the strike ended, the back up in shipping was cleared up very quickly. Other regions are also having pr