​PMSA Warns About Trade Impact on Ports

Posted March 6, 2017
Category Company News
During a February address to members of the Northern California trade community, John McLaurin, President of the Pacific Merchant Shipping Association (PMSA) – representatives of owners and operators of marine terminals and U.S. and foreign vessels, warned attendees the Trump administration’s “…restrictive trade policies will negatively impact port volumes and result in job losses throughout the supply chain from anyone that touches and moves cargo – to anyone that owns, buys or sells it. The Trump administration trade policy is unknown at this time, but millions of jobs and the economic health of public port authorities, local, regional and state economies are at risk.”

McLaurin said California ports are also at risk due to the changes underway within the maritime industry: “The maritime industry is evolving – quickly. Ocean carriers are consolidating – with more on the horizon. In 2016 we saw two Chinese lines merge; CMA purchased APL. In 2018, three Japanese ocean carriers will become one – which will also impact multiple marine terminals in California. In addition, we have witnessed bankruptcy filings in the past twelve months, both for marine terminals and ocean carriers. Here at the Port of Oakland, we used to have eight terminal operators – we now have four. In Seattle, the APL terminal, T-5, sits empty. There is speculation about the fate of several other terminals in Seattle and San Pedro.”

New ocean carrier alliances prompt concerns regarding which ports will be winners and which will be losers: “Come April of this year, new vessel alliances will take shape and port rotations will be finalized. The realignment of four vessel alliances into three is the latest effort by the shipping industry to cut costs.”

McLaurin said the trans-pacific shipping market will give Chinese carriers the lead:
·         The Ocean Alliance (China Cosco Shipping, Evergreen Line, CMA CGM, and OOCL) market share will be approximately 40%
·         THE Alliance (NYK Line, MOL, “K” Line, Hapag-Lloyd, Yang Ming Line) will have a 27 % share.
·         2M Alliance (Maersk, MSC, Hyundai) will have 20%.

McLaurin said the big unknowns now are: “What size vessels, frequency and schedule will be deployed to which ports and terminals is unknown at this point. One of my members described the anticipated deployments and port and terminal choices as a game of musical chairs.”

Adding to this uncertainty, “California ports face environmental requirements that are not found …by any other port gateway in North America. Please note the following mandates faced by California’s ports – and all of us in the supply chain:
·         By 2030, California will reduce greenhouse gas emissions by 40% below 1990 levels, and reduce greenhouse gas emissions 80% by 2050;
·         By 2030, California is to increase from one-third to 50% its electricity derived from renewable sources;
·         California will reduce petroleum use in cars and trucks by up to 50% by 2030;” 
(Source: American Journal of Transportation)
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