We heard rumors in recent months, but today we received confirmation that Ports America Outer Harbor Terminal will be shutting down operations. The terminal will continue business as usual for 30 days and then discontinue vessel and cargo handling operations.
This leaves the port of Oakland with essentially three terminal operations (SSA Terminal, TraPac, and the newly renamed ETS Everport Terminal Services). The big question is where are all the vessels and containers that were calling Ports America going to divert their containers to. The message from the Port of Oakland indicated the following:
The Port said the departure of Ports America provides two significant opportunities:
• Ships and cargo can be redirected to Oakland’s other marine terminals which have excess capacity; and
• The Port can find new, better uses for Ports America Outer Harbor Terminal
I am a bit surprised to hear the port of Oakland indicating that the other terminals have excess capacity to absorb additional vessels and containers. My first guess is that SSA Terminal, as the largest operator, will be the likely destination for many of the containers. However SSA Terminal has already been dealing with congestion issues over the past year. Can SSA Terminal really absorb all of the containers that formerly called Ports America?
TraPac shares a border with Ports America. Is there a possibility that TraPac may take on some of the land formerly operated by Ports America? The port of Oakland seems to be open to looking for other uses for the land besides container operations. If TraPac were to take on vessels and containers that formerly called Ports America, I am unsure if they could do so without additional yard space.
I also have extreme doubt that ETS would be willing to take on additional vessels. From talking to an Evergreen representative, I get the sense that ETS terminal has just enough equipment and space to efficiently handle their containers. Why would they want to screw up their operations by taking on additional containers that they don’t have room for?
It’s going to be an interesting few months as we find out how this situation plays out.
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