Changes are underway in the shipping that traverses the Panama Canal, and this is already affecting the way that trucking is conducted in the U.S. and will continue to change in coming years.
Already a factor over much of the Globe, is the notion of shorter truck by land routes. In other words, goods are received at several different ports, and then trucked only a short distance to their final destination. In the U.S., goods from Asia have historically come across the country via the Port of L.A. and other west coast terminals.
Now, with improvements made to vessels going through the Panama Canal, more tonnage will be able to pass through from Asia and dock at eastern U.S. Ports. This will ultimately sound a death-knell of sorts for much of the long-haul freight in the United States. Effectively, as more and more goods are received into a greater number of locales, trucking will become more tight knit and compact than ever.
Coupled with this change in shipping distance, are the logistics that will go along with it. Much if not all of this freight will become electronically tracked, and place drivers on much leaner and more efficient lanes of travel. In the end, if such a trend keeps up, the days of Full Truckload Long-Haul driving may quickly become a thing of the past.
After reading the article, I likened the whole idea to scaling the entire world down to one giant sized warehouse, with the trucks of our nation being nothing more than pallet shuttles in between aisles…. Yeah, sounds about right.
Read the entire article at Trucks.com following:
East Coast ports undergoing new infrastructure investments will soon accommodate some of the world’s largest cargo ships moving through the Panama Canal.
While the expansion is already affecting global trade, it is expected to alter U.S. trucking routes. For shippers moving Asian products to the East Coast, the ability to use larger vessels that can directly access ports like Savannah, Ga., and New Jersey will eliminate the need for long-haul shipping.
The trucking industry will start to feel these effects as more port infrastructure projects are completed over the next several years to support a shift to shorter distance regional trucking.
A Faster and Cheaper Route Between Asia and the East Coast
Completed in June 2016, the expansion doubled the canal’s capacity to accommodate Neopanamax ships of up to 1,201 feet with 13,000 TEUs, which is a unit of cargo volume based on the size of 20-foot-long modular containers.
Most U.S. ports are still deepening their channels and upgrading their infrastructure to accommodate these vessels. New Jersey, New York, Baltimore and Norfolk, Va., have increased their channel depths to 50 feet and created more berthing space. The Port Authority of New York and New Jersey also recently finished raising the clearance of the Bayonne Bridge to allow access to the Port Newark Terminal.
Up to 10 percent of container traffic between the U.S. and Asia could shift to the East Coast by 2020, according to an analysis by C.H. Robinson and Boston Consulting Group. This trend is expected to shape investment and routing decisions of retail and truck carriers, and magnify the decisions shippers make about which ports to use.
The Panama Canal expansion would alter trucking routes in the U.S. by reducing the need for long hauls starting on the West Coast and creating more demand for regional hauls on the East Coast.
The change will happen slowly as more ports undergo infrastructure changes to accommodate such vessels, said Steve Raetz, director of research and marketing intelligence for C.H. Robinson.
A meaningful shift in freight flow will prompt trucking companies to reallocate resources, labor and routes to meet market demands, Raetz said.
Larger Vessels Already Calling at Select Ports
The demand for trucking is already growing at some ports. In early June, the OOCL France became the largest ship to dock on the East Coast, calling at Charleston, S.C., and Savannah with a record 13,209-TCU volume.”
““Ships are getting bigger,” said Joe Harris, spokesperson for the Virginia Port Authority.
The Port of Virginia handled a 12 percent volume growth in the past year with 30 fewer ship calls, Harris said. Truck-gate moves – every time a truck has a touch point with a container in the port – rose 18 percent compared with the previous May.
The port has already expanded its truck capacity with more gates.
“Ocean carriers are wanting to take advantages of the deep water here in Virginia, and our trucking community is within a day’s drive of two-thirds of the nation’s population,” he said.
More cargo moving to the East Coast could slowly reduce the need for coast-to-coast trucking, said Greg Plemmons, a vice president for Old Dominion Freight Line.
While this could require Old Dominion to make changes in its fleet and staffing, Plemmons does not believe it will impact profitability.
“More [cargo] is moving to the East Coast, but from the perspective of what coast doesn’t make a difference to us,” he said. “We certainly have the ability to shift resources if needed and are equipped to handle cargo wherever it enters the U.S.”
Impact on Market for Drivers and Equipment
The “battleground” of East Coast-West Coast port and trucking competition will not necessarily be on the coast itself but at inland ports where shippers now have more options, according to C.H. Robinson analysts. Shippers in cities such as Memphis, Chicago, Detroit and Columbus may soon find it more attractive to truck cargo to ports like Savannah and Norfolk than to Long Beach or Los Angeles.
Trucking manufacturers are responding to the slowdown in long hauls by changing their product offerings. Navistar International Corp. recently debuted a new regional semi-truck. Volvo also just launched its VNR regional haul line to tap the needs of the growing regional market.
The company is “confident” that more cargo will start shipping to the East Coast once infrastructure investments are complete, said Magnus Koeck, vice president of marketing and brand management for Volvo.
Customers have already been moving to smaller sleepers and day cabs in recent years, and the trend is expected to continue as more large vessels from Asia reach East Coast ports, Koeck said.
More of an issue is how changes in routes could impact the demand for drivers, he said. There is concern that growth in regional hauls could lure drivers away from long-haul routes where the shortage is especially problematic.
“Younger drivers have somewhat different values than older drivers, and they are valuing time off with family and friends very high, meaning it will be harder to recruit drivers just for long-haul operations,” Koeck said.”