Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Maersk Decision Means Less Cargo, Jobs At West Coast Ports

with 2 comments

Cunningham Report

Work on the expansion of Roberts Bank to provide new container berths is currently suspended. My advice to the Port of Vancouver would be to leave it that way. There is not going to be any requirement for additional port capacity for quite a while.

Maersk is eliminating the Pacific Northwest from its TP6 service that now calls in Tacoma and Metro Vancouver after leaving the APM Terminal at the Port of Los Angeles. In the future, the TP6 service will call only in Los Angeles before returning to Asia.

Demand for shipping goods across the Pacific from Asia to North America has been steadily dropping. The reason is the recession – which now looks like turning into another depression. It certianly means that for the US, majr restructuring of their economy is going to take place, to reduce the need for imports and greatly increase the productivity of their industry with respect to energy use. The first and biggest impact is already being seen in the auto sector.

Seattle’s container counts … have dropped by 11.2 percent so far this year due to the economic downturn

There is a lot of spare capacity at Roberts Bank right now. Building more in the current econimic climate makes no sense at all – just from the point of view of sensible business planning. All the other west coast ports are going to be doing whatever they can to hold onto and attract more of the rationalised shipping service which means rates will be cut. This is not a market where further investment will be bring great returns. The risk is that the new berths will be idle, and what traffic they can capture will be so unprofitable that its only justification will be to avoid further lay offs and redundancies.

Without lots more containers to move around,  most of the rest of the Gateway has also lost its rationale. It may be necessary to have governmnet funded stimulus packages to help our economy but that should be directed at helping our industry to also transform itself into a new model better suited to a world that is very different to the one we have seen in the last sixty years. Trade is going to be different. While oil is cheap now, that can’t last indefinitely. We know that our auto industry is inextricably tied to the US – and there building big vehicles to move one or two people around no longer makes any sense (if it ever did). That is why the US automakers are in much worse shape that their competitors. And is also one of the reasons why the US congress is reluctant to advance any more money, without some kind of credible business plan. The old model no longer works. Building freeways is part and parcel of that model.  And it is not one that we should continue to pursue.

We need to have an economy that lowers our ecological footprint. An economy that will allow us to have a reasonable standard of living, and a much healthier life style and a sustainable future. I do not see any reason now for port expansion. And I see every reason to divert whatever we intended to spend on automobility to be diverted to other systems that we know will work to reduce trip distamnces, allow much greater accessibility to all the goods and services we need and at the same time greatlky reduce many of the risks that car use exposes us to. And none of this requires anything that we need to invent or even dramatically improve technologically. There is probably not much gee whiz in walking, biking, buses and trains but those are the ways we used to get around before we all had cars, and we can do again.

Written by Stephen Rees

November 23, 2008 at 8:45 am

Posted in Gateway

2 Responses

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  1. The Seattle P-I says that Maersk is moving its operations from Tacoma to Seattle:

    The change is part of a worldwide vessel-sharing deal between Maersk and the French shipping line CMA.

    and that Maersk accounted for nearly 10 percent of Tacoma’s annual volume of shipping containers.

    http://seattlepi.nwsource.com/business/389328_maersk26.html

    Ron C.

    November 25, 2008 at 1:10 pm

  2. Yes Ron – the idea is that by combining schedules Maersk and CMA can cut their costs by reducing capacity. The fact that some ships change ports of call every so often is of no concern at all – it is the overall decline in trade I am pointing to. And it is not just across the North Pacific either. It is truly world wide. And anyway that information is in the original post I linked to. So what.

    Stephen Rees

    November 25, 2008 at 2:46 pm


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