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Oakland forecasts permanent changes in container transportation processes

The Port of Oakland has cautioned that the coronavirus pandemic could permanently alter container transportation practices, as shipping lines may consolidate more cargo on bigger ships while reducing the frequency of voyages.

Supply chains could also be altered, the port added. For example, the online purchasing explosion prompted by the shelter-in-place orders has hastened distribution centre reconfiguration and consolidation. Distribution hubs could be relocated to more central locations to serve population centres from fewer outlets.

“We’ll be facing a new normal,” commented Port of Oakland Business Development Manager Andrew Hwang. “Distribution patterns will change…it won’t be like it was.

This new normal has been caused by the big number of blank sailings across the globe. The Port of Oakland will see a decline in cargo volumes as a result of the cancellations in the number of sailings, according to Oakland Maritime officials.

The Port told the Harbor Trucking Association last week via video conference that 20 May and June voyages to Oakland have been scrubbed. The result could be a 5%-15% drop in containerised cargo volumes heading into summer.

“It’s a clouded picture,” said Hwang. “About 10% of our scheduled vessel arrivals have been cancelled by shipping lines, but we don’t know if that will translate into a similar drop in volume.”

The Port blamed vessel cancellations on the coronavirus pandemic which has stunted global trade. With consumer spending down, there is less merchandise to load onto ships. That means fewer vessels needed between Asian manufacturing centers and US ports. Import volume is expected to suffer the biggest cargo decline in the coming months, according to the port.

Demand for Oakland exports remains strong, but voyage cancellations could place some markets beyond reach, the port explained. Fruit, nut and meat exports are particularly coveted by overseas trading partners, especially in Asia, while Oakland exports to South Korea increased 31% last month, and to Japan 18%.

The Port also mentioned that cargo is moving smoothly through Oakland with no shortages of labour or equipment.

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