Posts Tagged “rail service”
Maersk plans to eliminate Panama Canal vessel transits on a north-south service between Oceania and the U.S. East Coast, citing the ongoing drought that has reduced ship transits and container carrying capacity through the waterway, Journal of Commerce reports.
The Copenhagen-based carrier said Wednesday that its OC1 service linking Australia and New Zealand with the ports of Philadelphia and Charleston will instead use a 50-mile rail service across the Isthmus of Panama to handle cargo between the Atlantic and Pacific.
As a result, the OC1 service will be broken into two loops, Maersk said. The Pacific loop will drop off northbound cargo at Balboa for the land bridge service via rail to Manzanillo, where the Atlantic loop will retrieve the cargo and resume waterborne service.
The carrier did not say whether the nearly 26-day transit time from New Zealand to Philadelphia would change due to the land bridge. It said that while northbound cargo will not be delayed, southbound cargo may see some delays.
Other Maersk services from Asia to the US East Coast will continue to use the Panama Canal.
Along with the Panama Canal, Maersk said the OC1 would omit Cartagena, Colombia, as a call. It also directed shippers to the option of its PANZ service between Oceania and the US West Coast.
Maersk said the decision to omit the Panama Canal crossing on OC1 was “based on current and projected water levels in Gatun Lake,” which provides the water to raise and lower vessels in the canal’s locks. As of Wednesday, the Panama Canal Authority (ACP) said Gatun Lake was at 81.6 feet, compared with a five-year average water level for January of 86.9 feet.
Low water levels have forced the ACP to only allow 24 ships of any size to transit the Canal daily, down from the 35 to 40 ships it could handle before the ongoing drought that has reduced Gatun’s water levels. Ships must also carry less cargo as the Canal is limiting the maximum depth of neo-Panamax vessels to 44 feet from 50 feet. Smaller Panamax vessels, such as the ones in the OC1 service, are restricted to a 39.5-foot depth versus the typical 45 feet.
In early December, ocean carriers in THE Alliance said they were preparing to divert east-west vessel services from the Panama Canal due to the potential for transits being reduced to as few as 18 by February. But with better-than-projected water levels on Gatun Lake, the ACP did not implement that further reduction.
Importers of Mexican produce at Nogales are frustrated over the lack of adequate truck supplies, high freight rates and are looking to the railroads to solve some of their problems, according to a recent news story in The Packer, a weekly newspaper for the fresh produce industry.
Struggling to acquire enough refrigerated trucks, complaints were common as the holiday season approached in late 2014. One importer described it as the worst holiday season they ever experienced getting enough trucks. However, some say the equipment shortages extend well beyond the holidays. As a result importers are taking a look at rail service.
Rail is conducive to a number of Mexican vegetables crossing the border at Nogales ranging from had shell squash, cucumbers and other hard grown Mexican items.
The Union Pacific Railroad is currently upgrading 20 miles of rail near the U.S.-Mexican border to make it easier for inspectors to check loads. There also is development of a rail switching yard in Tucson, which would help rail service.
If rail service is fast enough, items such as bell peppers also would be considered. One shipper complained of paying up to $6 per box in some cases to ship product from Nogales to the East Coast this past vegetable season.
Nogales is pretty dead this time of the year with the exception of the Mexican grape season which has just got underway.
More Trucks are Needed for Onion and Potato Shipments.
Storage onion shipments remain sluggish and shippers continue to have difficulty attracting enough trucks.
About 500 to 600 fewer loads had shipped out of the Treasure Valley season-to-date. There are adequate supplies in storage, and it should stay that way until shipments end in April. Treasure Valley includes all the lowland areas from Vale, OR on the west to Boise, ID on the east. Historically, the valley had been known as the Lower Snake River Valley or the Boise River Valley.
Port slowdowns in the Pacific Northwest are one reason for the slower movement. Washington state onions that normally would have been exported have had to fight Treasure Valley product for a share of the domestic market. Also lack of trucks have been giving shippers headaches this season. Trucks have been tight, and with an uptick in the economy, trains have been busier hauling coal, oil and other products. Some shippers are bemoaning rail service in the area, which isn’t as good as it used to be.
Idaho/Oregon onions – grossing anywhere from $3400 to $4400 to Chicago depending on truck availability.
Red River Valley Potato Shipments
Despite transportation challenges, Red River Valley shippers shipped about nine percent more potatoes than they did in the first half of last season. Shipments the second half of the season will likely also exceed last year. Storage issues plagued last year’s crop, especially late in the season. This year’s storage crop appears to be in very good shape.
It is not uncommon for potato shippers waiting up to four days to obtain a truck.
Grand Forks, ND red potatoes – grossing about $3900 to Atlanta.