Longer and wider: The maritime / port interface
By their physical characteristics, Post-Panamax ships impose several constrains on berth and crane operations:
Reduction in ship call frequency
Large ships are usually calling less ports, mostly because of draft and crane restrictions, but as well the necessity to generate enough cargo to economically justify a call by a larger ship. However, for the ports that remain called the frequency may likely not change since the shipping line may elect to keep the same call frequency, such as a weekly call, but with larger ships. For Cartagena, since the expansion of the Panama Canal in June 2016, there has been a reduction of about 28% in the number of ship calls from main liner services while the number of calls from feeder services has remained unchanged (Figure 3). This is indicative of a consolidation of main liner services towards larger ships.
Figure 3: Monthly Average Ship Calls by Type of Service at the Port of Cartagena, 2014-2017
Slower intra-port navigation
Post-Panamax ships move at a lower speed due to their mass and size, implying longer times to reach the berth. Evidence underlines that a post-Panamax ship can take up to 50% more time to dock than a Panamax ship. For instance, if a ship takes 1 hour to travel from the terminal’s entrance buoy to a berth, then it may take a post-Panamax ship 1h30 to cross the same distance to dock. This many reduce the port’s channel capacity and impair intra-port navigation, including pilotage and tugs. For Cartagna, the access channel (Bocachica) capacity is particularly important as dredging to 20 meters was recently completed, which enables to accommodate ships of up to 16,000 TEU. Yet, since this channel is one-way, its use by slower Post-Panamax ships is constraining its capacity.
Longer berth space
While a Panamax ship has a length of up to 295 meters, a Neo-Panamax ship can reach a length of 366 meters. Therefore, if a terminal was designed to accommodate three Panamax ships at once, it may now be able to only accommodate two ships at once if a Post-Panamax ship is docked. Between 2014 and 2017, the average length (LOA) of ships calling the port has increased by 25 meters for main line services (average LOA of 250 meters) and by 15 meters for feeder services (average LOA of 175 meters) (Figure 4). The trend has particularly accelerated for main liner services since the expansion of the Panama Canal.
Figure 4: Monthly Average Ship LOA by Type of Service and Terminal at the Port of Cartagena, 2014-2017. Note: The divergence in ship LOA between Contecar and SPRC from mid 2015 is related to the decision of a major shipping line to switch its main line services from SPRC to Contecar.
Loss of crane productivity
Since Post-Panamax ships are wider, the average hoist distance is increasing, implying that less container moves per hour are realized. For instance a crane servicing a Post-Panamax containership could see its number of moves per hour drop from 35 to 30 moves compared with a Panamax ship. If cranes are moving alongside to service different rows there is need for more boom up and down because of the different superstructure of Post-Panamax ships. This also negatively impacts crane productivity. Since the expansion of the Panama Canal, the average number of container moves per ship call has increased by 35% for main liner services while they remained relatively similar for feeder services, but with a recent trend upward (Figure 5). With the same equipment, a higher number of moves per call is placing pressures on its productivity.
Figure 5: Monthly Average Container Moves by Ship Call by Type of Service at the Port of Cartagena, 2014-2017.
Longer berth time
Because of the above, Post-Panamax ships can spend more time at a birth, which reduces crane availability. In addition, there is more time spent unlashing and lashing container berths, but there is also a net benefit if there is a consolidation from two services into one service.
Feeling the surge: Yard operations
Because of the factors described above, Post-Panamax containerships also impose changes on yard operations:
Surges in yard haulage
Since more cranes need to be serviced at the same time there is a need for more equipment to haul containers to and from the stacking areas. This ties up additional equipment and labor. Typically, 4 or 5 cranes need to be used to service a Post-Panamax ship instead of the 2 or 3 required for a Panamax ship. Looking at the average and the standard deviation in the number of moves handled by the port of Cartagena reveals significant differences (Figure 6). Compared with feeder ships (LOA less than 250 meters), Panamax ships (LOA between 250 and 295 meters) generate on average 125% more moves but with a standard deviation of 27% more. This means that Panamax ships have a good stability and consistency in the throughput they bring to the port. Post-Panamax ships (LOA above 295 meters) are bringing on average 35% more moves per call than a Panamax ship, they have a standard deviation that is 54% higher. In this context, Post-Panamax ships are more volatile since shipping lines have yet to effectively consolidate their services to have a greater load stability. In addition to bring surges to yard haulage, they are associated with greater volatility in the moves they bring, making yard operations even more complex.
Figure 6: Container Moves per Ship LOA, Port of Cartagena, 2014-2017
Surges in yard storage
More containers arriving and exiting a yard during a similar time frame imposes additional pressures to re-stack containers, particularly on the yard’s gantry cranes and the staking density. This could involve a growth of the average number of moves per container in the yard, each of these move not subject to revenue. The drop in main liner ship calls (see Figure 3) and a relatively similar throughput is indicative that containers are spending more time in the yard between transshipment services.
Surges in reefer slots usage
In a similar fashion than dry boxes, there is a higher number of reefer containers being handled at once. For ports that are along major reefer trade lanes, the number of reefers handled per call can increase rapidly, tying up fixed and limited reefer storage slots. Further there is a surge in electric power consumption even if at the aggregate level a similar number of reefers are handled, which may require additional electric power generators. A look at the full reefer moves handled per ship call at the port of Cartagena (empty reefers were discarded since technically they do not require power and are handled as regular empty containers) underlines an increase of 35% since the expansion (Figure 7).
Figure 7: Monthly Average Full Reefer Moves per Call by Terminal, Port of Cartagena, 2014-2017. Note: The divergence observed in mid 2015 is the outcome of a major shipping line switching its operations from SPRC to Contecar.
The rush: Gate / hinterland operations
The third dimension involves impacts on gate and hinterland operations:
Surges in gate access
Since more containers are delivered or picked up by Post-Panamax ships, the containers that are bound from or coming to the hinterland are moved in greater numbers through the terminal’s gate, particularly for importers wishing to collect their containers as soon as possible. Additionally, this places additional pressures on security and customs inspection services. The impact is less significant on ports having a notable transshipment role since the majority of the containers stay in the yard. Therefore Cartagena, with a 65% transshipment incidence, has been less impacted by this effect.
More local congestion
Because of the above, more trucks may be queuing on local roads to enter the terminal, increasing the risk of congestion of local roads and negative community impacts.
Supply chain adjustments
With changes in the frequency and volume of port calls, the supply chains that are serviced by such flows need to adjust. This often results in more inventory in transit and more warehousing, tying up more capital.
Neo-Panamax; New challenges
The example of Cartagena underlines the paradox that Post-Panamax containerships are imposing on the maritime transport system. This is particularly the case for the North American East Coast and the Caribbean, which have seen since the expansion of the Panama Canal in 2016 a rapid growth of Post-Panamax ships transiting through the region. However, port throughput figures do not show remarkable growth (and even a slight drop in 2016 for many ports), which underlines that the transition towards Post-Panamx ships is one that mostly benefit the maritime shipping lines through lower operating costs and a rationalization of their services. The expectations that bigger ships would bring more cargo appears incorrect in the case of Cartagena.
The technical and operational changes that these ships create places intense pressures on terminal operators to cope. Many face the challenging task of adding new equipment, particularly cranes, while this equipment does not necessarily result in additional terminal capacity, but simply as a strategy to upgrade the terminal to more stringent operational conditions and to remain competitive. Post-Panamax ships tend to negatively impact the dynamic capacity of a terminal, particularly when this terminal is a transshipment hub combining deep sea and feeder services.
In a Post-Panamax context, the function of transshipment is being challenged as well. Transshipment usually involves less revenues per TEU than domestic cargo provides, commonly by a factor of 1 to 3. This has therefore the paradoxical outcome of reducing the revenue per TEU as the share of transshipment increases. So, a port such as Cartagena vying to maintain and expand its role as a major transshipment hub, may do so with less revenue per TEU handled. Further, there is usually no demurrage for transshipment, so if containers are staying longer at the terminal, this is a cost that has to be assumed by the terminal operator. Longer stays in the yard also increases the risk of additional handles during yard management, again a cost that must be internalized. The introduction of Post-Panamax ships is therefore prone to unintended consequences as shipping lines internalize the benefits and externalize the costs.