March, 28, 2016

What does your Supply Chain look like without Direct All Water Service to Boston Port?

What is happening and what can happen?

There is much discussion among CKYH+E (COSCO, Kline, Yangming, Hanjin and Evergreen) members that beginning later this spring, the direct all water service from Asia to Boston will be discontinued.  This weekly service that docks at the Port of Boston has been critically important to the import and export communities of New England, as it has provided reliable, consistent, and cost competitive service to the New England market to/from Asia.

Why would the CKYH+E Alliance discontinue the service?

The widening of the Panama Canal (officially to open in late June, 2016) will allow much larger vessels to transit its locks. Some carriers are considering increasing their Panama all water vessel size this summer from 4500 x Teus to 8000 x Teus, and there is concern that smaller ports like Boston will not be able to handle the larger vessels. 

When will the decision be made?

What we have learned is that a decision will be made by the Alliance in the next 60 days.  One Alliance vessel in the 8000 x Teu range is destined for Boston in April to “test” the port’s and harbor’s ability to handle a laden vessel of that size.

What are our primary concerns if the service is discontinued?

• This will result in a significant increase in cost for many New England companies as much of the container volume will be discharged in NY/NJ and trucked to/from New England.

• NY/NJ terminals are already congested, and adding 500-750 x Feus per week from a Boston discharge to a NY discharge will simply add to the congestion issues we face already.

• Availability of truckers, chassis, and drivers to service this effectively ex-NY/NJ.

• Access to sufficient heavy weight equipment to service exporters in the New England market who have relied on easier market access via Boston port.

• Because of the distance between NY/NJ terminals and much of New England, allowable driver hours becomes an issue to manage, which may require stop-offs or delaying containers at intermediary points, possibly in Worcester, MA. Additionally, this impacts drop-and-pick, chassis usage, empty returns, and detention free time allowances.

• Even more truck traffic on I-95.

What are we doing to prepare?

We at Laufer have been active in the New England market for years, and are hoping that the CKYH+E Alliance finds a way to continue their direct all water service to Boston.  If they should not however, we are working with our dray network to address the issues above.  We are also exploring shuttle services to/from Worcester, MA CY (both rail from NY and truck).  We are also identifying our most vulnerable customers to the dropped call, and exploring custom solutions for each one that we will be presenting in the next 30 days.

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