As I hinted at earlier in the week, we're seeing some changes in ship visits here in New York harbor. This is interesting because shipping traffic is such a bellwether for what the economy is doing.
Now, I'm no trade analyst, and I'm also not documenting this info with much in the way of hard numbers. I'm reporting anecdotal observations, which are only one weak part of forming a picture of what's going on.
Several things are happening at the same time. The Panama Canal expansion is complete, and shipping trade patterns are already adjusting, and in many cases, already adjusted. Some US ports are midway- or already finished in dredging their channels to allow for increased traffic and deeper draught ships. Presumably there's a sliding regime of scale and scope that allows for equilibrium between the two, but these programs are starting and finishing on their own time, so ports are coming onstream with their changed infrastructural capabilities on a continuous, chaotic basis. Must be fun for the shipping companies to deal with that.
Hanjin Lines was a massive presence in the US, and their liner service between the Far East, EU and the US disappeared overnight when the company went tits up. And what a shit show it is. There's stacks of empty Hanjin containers at most terminals in the NY/NJ area cluttering up the place until buyers can be found. This was a serious disruption, but there are other companies with other ships all starving too, so the capacity was absorbed quickly. Economies of scale being a thing, and the fuel price crisis still being in recent memory, old-style Panamax ships are being scrapped before their midlife period even begins and newer and larger ships ordered back in the heyday of shipping construction are available.
Awful lot of 100,000 ton container ships available or being scrapped. Wicked bahgen prices, too, like we used to say where I grew up.
So the principle bottleneck here in port of NY/NJ has been the Bayonne Bridge, which is too low to allow new larger ships into the container ports of NJ, which have the infrastructure in place to handle super-size ships. (room, road access, and seriously big-ass container cranes). Some New Panamax or smaller ships can fit under the bridge at low tide, if they have a mast that can be articulated and lowered.
This actually presented a real challenge when Hanjin went under. They had ships on the way to ports all over the world, and ports didn't want to take the ships- they weren't sure whether or not they'd be getting paid to empty the ships or whether or not the ships would be leaving their port since the company couldn't pay crew or buy fuel. On top of that, Hanjin's old Panamax-or better-sized ships could fit under the Bayonne bridge, but if they weren't going to be loaded with freight on the outbound leg, they would be too tall to get under the bridge. We had some ships anchored or slow steaming out in the ocean for a few days while they pondered what the hell to do.
Well, since NY/NJ is pretty fucking broke after years of spendthrift government, they didn't have money to build a new Bayonne Bridge. So they're raising it up in what is either a brilliant or absolutely retarded delaying tactical scheme- I'm not sure which . You can read about it here. This will allow larger ships to come into the ports on the far side of the bridge.
We're already seeing a fair number of new post-panamax scale ships showing up here. With Hanjin's capacity up for grabs and container companies in the middle of their own crisis any chance at making money, or, more accurately, losing money more slowly, had to be grabbed out of the vacuum left by Hanjin's passing. Chinese companies Yang Ming Lines and Evergreen have added liner service using some of their existing panamax fleets as a result, which is probably nice for them. Yang Ming is transitioning from monthly to weekly service, and Evergreen is still adding port visits too.
With smaller ships, this also means more traffic, which is good for the pilots and and bums like me who rely on gassing up these beasts while they're here. I'm doing a LOT more full loads than ever before, servicing these ships, which also tells me that we're going to need bigger bunker barges too, eventually. Some of these ships are taking 6,000 tons of heavy oil, 500 tons of diesel and an equal amount of ultra-low sulphur fuel oil, which is diesel oil cut with a soupcon of cleaner heavy fuel oil.
Practically speaking, this is working out well for me. Chinese ships tend to have well-trained, disciplined crews who work fast and efficient together in teams. This means that I don't have to spend 2 hours watching a bunch of hung over surly Russian engineers using their thumbs for fart corks, berating the one 90-lb Filipino crewman trying to muscle 2,000lbs of fuel hose into position, or worse, the arab engineers who come down to my office 3 times over the course of 90 minutes insisting that I get up on his ship right now and connect my own hose to his ship.
Yeah, I know. Not very PC. If it wasn't truly a thing, I wouldn't be reporting it.
What all this means, big-picture-wise, is a mystery to me still. I know that on top of this Shepard's Pie of information, new fuel regs will drastically change things, too. Couple more years, fuel will get a lot cleaner and a lot more expensive in much of the world, as new environmental regulations come onstream. That's going to mess with things too. If container trade is already so unprofitable because of overcapacity, imagine what's going to happen when fuel is suddenly vastly more expensive. I suspect that the very largest of container ships will weather it better than the current sized-fleet.
Stand firm, ye boys of Maine
34 minutes ago