Eastern Railroad Discussion > WSJ: Storms clouds ahead for container ship imports?

The Wall Street Journal has an article about the concerns many shipping companies have about supply of ships (rising) and demand for cargo (falling) as the cost of fuel is rising.  The trade conflicts, slowing demand, and too many new ships has caused concern in many places.  In the US, many containers are repackaged near a port, and dispatched by rail.

Container ship operators see growth dropping by 2/3, to about 1% in 2019, but see fuel costs rising as new requirements kick in.  Some of these fuel rules will send older ships to the boneyards, but that won't make a big impact on the new ships being delivered.  Ships designed for the new Panama Canal are making fewer port calls (concentrating their deliveries), which complicates the issues on some ports that are skipped.  One ship broker sees cargo growth of 2-3% over the next few years, with cargo capacity growing at 5% annually. Much of it in 22,000 box vessels.

It should be interesting to see how ports like Jacksonville, Charleston, Savannah, Brunswick, Baltimore, etc handle this situation.  They've spent heavily to deepen channels, and improve access, will their specialized freight (car import / export, paper pulp, scrap, etc) be sufficient to carry their business if they lose the box trade?

https://www.wsj.com/articles/a-storm-is-gathering-over-container-shipping-11551612600

They are just talking about less of an increase in traffic than previous years.  I dont think this will affect the RR's...

While I agree that the overall rate of growth is likely to slow, the more noticeable effect on rail movements may result from the concentration that Lackawanna alludes to.  With the opening of the new locks in the Panama Canal, New Panamax vessels are capable of handling over 12,000 teus versus 5,000 teus for the old Panamax.  The new Maersk Triple-E class handle over 18,000 teus.  There will inevitably be winners and losers as ports compete for these mega-ships and rail container flows can be expected to change accordingly. 

Gordon

I was figuring what would slow down intermodal traffic and cause a slight increase in box-car traffic would be where some manufacturing is moving back state-side from China. Not necessarily a loss for railroads but maybe a minor adjustment in the type of trains being hauled. I heard NS is combining intermodal with manifest freight and increasing the speed limit of all trains to 60MPH thus making all manifests "Hot."

There's been a steady shift in garment making from China - Macau - Malaysia  to Pakistan - Sri Lanka - Bangladesh in recent years.  That's changed the flow of merchandise, and even the direction of ships.  For Pakistan originated commerce, much of that now goes via the Suez and Gibraltar to the US east coast.

China and Malaysia, in particular, have moved up the skills ladder, and are outsourcing some product making to lower labor cost areas. Just like Japan and Korea outsourced lower skilled labor to China decades ago.