Supertankers' waves felt in world's warehouses
An influx of super-sized container ships, motivated by the widening of the Panama Canal, will increase demand for industrial warehouses as goods bought online are stored before distribution.
These supertankers are the A380s of the sea, and while analysts argue supply is ahead of demand, the makers are building them as fast as possible. Nearly every year for the past decade supply has outpaced demand.
This year, the industry will add about 1.5 million 20-foot equivalent units (TEUs), or about a 10th of the 2012 fleet, according to brokerage Nomura. One TEU is the standard cargo box that can be easily transferred between ships, trains and trucks. The growth will put significant demands on industrial real estate near ports as well as on road and rail.
For the year to May 1, container volumes in Sydney rose by 4.3 per cent compared with the same period last year. In Melbourne, the trend has been similar, with container volumes up 6.6 per cent on a year ago, based on 2.5 million for the year to December.
The 77.1-kilometre Panama Canal, which connects the Atlantic and Pacific oceans, is a central thoroughfare for trade. It has two locks, or channels, 33.5 metres wide, and a third, wider lane is being built to accommodate the supertankers.
According to Jones Lang LaSalle Research, this new generation of transport, including Maersk Line's Triple-E vessels, will drive re-rating of destinations and transport nodes, and affect freight patterns.
Maersk Line's $190 million Triple-E is the largest ship in the world, at 400 metres, and able to carry 18,000 containers. An average supertanker is about 347 metres and carries about 7700 TEUs.
Maersk expects global trade growth at 2 per cent to 4 per cent, marginally lower than it forecast in February.
Nonetheless, Rich Thompson, the Chicago-based managing director for the global supply chain and logistics solutions team at Jones Lang, LaSalle, says the expansion of the Panama Canal was a reaction to the growth and evolution of transport by shipping container. "We expect these operational considerations to have an impact on industrial real estate as companies need to re-evaluate their supply chain networks," he said.
"The expansion of [Panama] has already sparked competition for port market share and the need for capital investment in projects like channel-dredging to accommodate larger ships with deeper drafts, but it also has the potential to shift the flow of goods as they are moved throughout the US."
In Sydney, Port Botany is expanding to accommodate long-term trade growth. The Port of Melbourne, the nation's biggest, is pushing ahead with a $1.6 billion expansion.