Copyright 2007, Traffic World, Inc.
Importers on the East Coast increasingly rely on all-water service from Asia as more containers are routed through the Panama and Suez canals, says Thomas DeMarino, IKEA Wholesale''s director of business development for ocean traffic in North America.
He cited the increase in services from Asia via the Panama and Egypt as the key reason for the change, though a reduction in direct intermodal service via West Coast ports to inland points, rail congestion and rising intermodal rates are also driving the trend.
Demand from shippers for all-water service to the East Coast should outpace demand via the West Coast as companies try to reduce the risk of a possible strike by the International Longshore and Warehouse Union on the West Coast next year, he said.
"Reliability is the key to success," said DeMarino. "Short advertised transit times are not a benefit if the actual transit time is longer."
Routes that involve transshipment are at a much higher risk of delays, the IKEA executive told the 2nd Annual East Coast Maritime Conference, which is sponsored by The Journal of Commerce, a sister publication of Traffic World.
DeMarino said East Coast ports have been able to handle the recent growth in traffic and that they will be able to handle continuing increases, but they will have to make some changes. In particular, marine terminals will have to remain open longer.