Friday, March 24, 2017

Port of Oakland Ready for Alliance Changes

By Mark Edward Nero

In an effort to soothe importers and exporters fearful of fallout as ocean carriers switch partners next month, Port of Oakland officials said March 22 that they expect to take on upcoming changes to container shipping alliances with little disruption.

“We’ve spoken to the shipping lines, we’ve spoken to our marine terminal operators and we understand their schedules,” Port of Oakland Maritime Director John Driscoll said. “We’re confident that Oakland will be able to accommodate the newly formed alliances efficiently.”

Eleven of the world’s largest container shipping lines are coming together in three new alliances. The port said it expects cargo volume to hold steady once new alliances begin operation April 1. Fewer but larger ships are expected to visit Oakland weekly, laden with more ocean containers. This is a change that reflects industry-wide consolidation as shipping lines cut excess vessel capacity to trim costs.

The carriers are changing partners after bankruptcy, acquisitions and consolidation roiled container shipping in 2016. Alliances allow participating carriers to share ships and port calls to reduce expenses while at the same time expanding service.

Some industry experts foresee port disruption if arrival schedules change or shipping lines redirect to different marine terminals, with the worry being that cargo flow could be inhibited, leading to congestion at major ports.

Oakland officials said they don’t foresee difficulties in working with the new alliances. Since most of the port’s vessel calls are concentrated in just three marine terminals, that means cargo relocation should be minimal.

The port said it expects to handle 29 weekly and two fortnightly vessel calls in the new alliance structure, and that it anticipates no loss of cargo in Oakland, even though weekly vessel calls will decrease from 32 to 29.

The Port of Oakland is expected to receive direct calls from 13 different Chinese ports, including six weekly calls from Taiwan and four from Southeast Asia, and seven weekly services from Oakland to ports in Japan.

It’s expected to take two-to-three months for all alliance changes to take hold, with the process including slotting vessels into new service rotations, and in some cases, older ships being replaced with newer, larger ones.