SOARING transpacific rates have spawned an idea involving US-flagged ships moving 53-foot containers from Asia to America with great profitability, according to John McCown, from Blue Alpha Capital, who worked with container pioneer Malcom McLean for 20 years.
Mr McCown is calling for the creation of a dedicated American carrier lifting 53 footers, pointing out that the increase in American crew costs would be more than offset by recent freight rate increases and reduced terminal handling costs as 53-footers would cost no more than lifting an FEU.
He said a ship configured for 53 foot containers, designed for bigger American trucks. would involve 33 per cent fewer moves and time to handle the same amount of FEUs, reported Singapore's Splash 247.
'The lower cargo handling cost alone is more than the crewing cost differential,' Mr McCown said. 'The second process difference occurs in California and is the disappearance of any need to transload cargo into 53-footers for later inland moves.'
With cargo in 53-footers already, he said, the expense and time to unload three FEUs and put the contents into two 53 footers goes away.
'Taken together the cost savings from these differences in processes are many times the incremental US flag crewing cost,' he said.
Mr McCown says the ideal candidate to start such a new service is JB Hunt, one of the largest transportation providers in the US and owner of the most 53-footers.
Moreover, JB Hunt is a pioneer in moving domestic freight on doublestack trains, eminently familiar with outbound freight from California moving in 53-footers.
'Container shipping is reporting exceptional results with record profits in each of the last four quarters. In the third quarter, it had total net income of US$48.1 billion for a profit to revenue margin of 42.7 per cent,' said Mr McCown reported Singapore's Splash 247.
'The crewing cost differential of a US flag vessel is $13,689 per day. With the largest vessels in the China-USWC lane (19,273 TEU) and using 90 per cent utilisation eastbound and 30 per cent westbound, that crewing cost differential works out to $20.72 per loaded TEU.' he said.
Compared to a recent Drewry spot rate in that lane of $5,587 per TEU, that cost is equivalent to 0.37 per cent of carrier revenue. Going back to Drewry's year-ago spot rate of $2,031 per TEU, the cost differential is equivalent to 1.02 TEU of revenue.
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Mr McCown is calling for the creation of a dedicated American carrier lifting 53 footers, pointing out that the increase in American crew costs would be more than offset by recent freight rate increases and reduced terminal handling costs as 53-footers would cost no more than lifting an FEU.
He said a ship configured for 53 foot containers, designed for bigger American trucks. would involve 33 per cent fewer moves and time to handle the same amount of FEUs, reported Singapore's Splash 247.
'The lower cargo handling cost alone is more than the crewing cost differential,' Mr McCown said. 'The second process difference occurs in California and is the disappearance of any need to transload cargo into 53-footers for later inland moves.'
With cargo in 53-footers already, he said, the expense and time to unload three FEUs and put the contents into two 53 footers goes away.
'Taken together the cost savings from these differences in processes are many times the incremental US flag crewing cost,' he said.
Mr McCown says the ideal candidate to start such a new service is JB Hunt, one of the largest transportation providers in the US and owner of the most 53-footers.
Moreover, JB Hunt is a pioneer in moving domestic freight on doublestack trains, eminently familiar with outbound freight from California moving in 53-footers.
'Container shipping is reporting exceptional results with record profits in each of the last four quarters. In the third quarter, it had total net income of US$48.1 billion for a profit to revenue margin of 42.7 per cent,' said Mr McCown reported Singapore's Splash 247.
'The crewing cost differential of a US flag vessel is $13,689 per day. With the largest vessels in the China-USWC lane (19,273 TEU) and using 90 per cent utilisation eastbound and 30 per cent westbound, that crewing cost differential works out to $20.72 per loaded TEU.' he said.
Compared to a recent Drewry spot rate in that lane of $5,587 per TEU, that cost is equivalent to 0.37 per cent of carrier revenue. Going back to Drewry's year-ago spot rate of $2,031 per TEU, the cost differential is equivalent to 1.02 TEU of revenue.
SeaNews Turkey