RLL Container Report – 20 November 2013.
From: John Keir, Ross Learmont Ltd Email: firstname.lastname@example.org
Unlike its more illustrious neighbour across the Bay in San Francisco, no-one has penned a chart-topping song dedicated to the major West Coast port of Oakland, so we have to make do with this little number from the Goodtime Washboard Three. This week, the Port of Oakland unveiled plans to invest USD 500 million in a Trade and Logistics Centre catering primarily for agricultural products. The port is situated next to California’s Central Valley, which is one of the most fertile areas in America producing $13 Billion worth of food products each year. The Central Valley is the source of one-quarter of all food produced in the USA and the local farmers raise no less than 250 varieties of crops.
As part of a general redevelopment for the city, the former Oakland Army Base will be turned into a large area of modern warehouses as well as a 10-acre rail terminal served by BNSF and Union Pacific rail companies. The port is already blessed with the necessary infrastructure, including deep channels, berths, cranes, dock space, more than adequate wharf length and an experienced labour force. This will enable the Oakland complex to serve both overseas as well as domestic markets. For overseas markets, Oakland can make use of the large quantities of 20’ and 40’ HC Containers that normally return empty to ports in the Far East. At the same time, domestic 53’ HC containers will be used to transport agricultural products by means of doublestack block trains to the large cities in the East and Mid-West of the USA.
And if you were thinking this is all very well but what is the relevance of this to Russia, then you will be surprised to learn that last week a more modest but equally significant project was announced by the Hokkaido Bank of Japan and the Amur Region in the Russian Far East. The Japanese wish to make use of the fertile farming land in the Amur region to cultivate crops specifically for the large Japanese domestic market. The agricultural products could then be transported the short distance via the Port of Nakhodka to the mega-cities on the other side of the Sea of Japan. To transport the cargoes, the Japanese will make use of all the 20’ and 40’ HC containers that normally return empty via the adjacent ports of Nakhodka and Vostochny. And having purchased vegetables from the small Izbas (cottages) along the River Partizanskaya after a visit to the Port of Vostochny, I can personally vouch for the quality of produce on offer to Japanese customers.
Another region with a great potential to load agricultural products in containers can be found around the Port of Novorossiysk. During the first ten months of this year, the port’s parent company handled over half a million teu, almost 3 million tons of grain, 724,000 ts of sugar and 647,000 ts of fertilisers. If we assume that one-third of outbound containers are currently loaded empty and take a modest 12 tons per teu, we arrive at a figure of one million tons of containerisable cargo. If we then take all Russian ports, then we come to a figure of 1.52 million teu that have been shipped out empty during the period from January to October.
Although general cargo levels dropped in Baltic ports, the number of containers passing through Tallinn, Riga and Klaipeda in the first 10 months of the year rose to 866,000 teu. To this figure can be added the 856,000 teu, which passed through the port of Gdansk between January and October. Indeed, the Gdansk throughput is rising so quickly courtesy of the regular calls by Maersk’s Triple-E fleet that Gdansk will soon have a greater annual box throughput than the three Baltic ports combined.
What all this means is that one of the major bulk sectors, such as fertilisers, grain or rice could gradually switch from conventional to container shipments. This will allow them to exploit the advantage of rising slot capacity at Russian and Baltic ports to secure new overseas markets. Crucially, the Russian exporters of agricultural produce would be competing against foreign rivals on the basis of quality and speed of delivery rather than being in the unenviable position of having to lower prices simply to maintain market share.
Ross Learmont Ltd
20 November 2013