COMBINING WORLD TRADE ROUTES ADAK INTERNATIONAL CONTAINER TRANSSHIPMENT HUB

The Port of Adak Alaska is ideally located to be a transshipment hub combining the well established Great Circle Route with the newly developing North Sea Route. This document describes the potential for this trade, the potential capabilities of the Port of Adak, and the practical elements of operating such a transshipment hub. The Port of Adak will be seeking international partners in the development of this capability.

BASIS OF THE TRANSSHIPMENT HUB PROPOSAL

While the Northern Sea Route has been proven to save time and money compared to Panama Canal and Suez Canal routes, these efficiencies and savings are limited if icebreaking ships are used to carry cargoes to their final destination in ice free waters. This is due to inefficiencies of icebreaking hull design in open waters, more reinforcing structural steel, more required horsepower and ice resistance, leading to more fuel consumption which somewhat offset the time savings.

 

These limitations are detailed in the analysis Engineering and Economic Implications of ice Classed Containerships, (Robert Dvorak, Massachusetts Institute of Technology, 2009.) This analysis reaches the conclusion that "icebreaking ships should only be used on icebreaking segments of a shipment journey." This points to consideration of use of a centrally located transshipment hub for cargoes that are easily transloaded such as liquids and containers. For example, this is already being done in Kirkenes Norway with oil being transshipped from icebreaking tankers from Russian production sites and transferred to standard tankers for delivery in Europe.

Likewise, containers shipped by Ice Class containerships on the Northern Sea Route can be transloaded onto vessels travelling the Great Circle Route in Adak, Alaska. About 7,000 vessels use this route regularly and pass by Adak on a regular basis. Many of these vessels are not loaded to full capacity and could call on Adak to deliver or pick up containers on the Northern Sea Route

Source: Marine Exchange of Alaska

While container vessels are usually scheduled to make dockings at their destinations at a specific time, the practice of slow steaming and super slow steaming means a vessel can stop to pick up cargo in the Aleutians, burn a little more fuel to make up the time, and still make their scheduled port arrivals. The difference in fuel cost should be

 

minimal compared to the cargo revenues. Vessels on the Great Circle route routinely stop at Dutch Harbor to pick up frozen fish cargoes in a similar operation.

A vessel heading for Adak to pick up or drop off containers could take a more direct route by going through Amukta or Seguam pass, which are deeper, wider and less congested than Unimak pass. The Jones Act vessels of Horizon Lines currently operate in a triangle going from Anchorage to Dutch and then back to Tacoma. For them to deliver European bound cargo to Adak would simply mean extending that triangle.

Cargoes destined for Canadian West Coast ports can be carried by foreign flag vessels destined for the Prince Rupert container port. There would be no restrictions on vessels travelling from Adak to Asia or Europe.

VESSEL CAPACITY EXISTS ON THE GREAT CIRCLE ROUTE

Vessels in the North American West Coast to Asia trades are currently operating at ABOUT 80% of capacity, so would have capacity to pick up loads in Adak. Operating at full capacity is a major goal of these carriers. The new vessels coming into the trade have also laid up many smaller containerships that could be dedicated to this Adak to Asia shuttle service if the cargo warranted it. Modern vessel tracking and vessel dispatch systems could facilitate diverting the most appropriate vessels to Adak to pick up these loads.

Initial reviews by the Alaska Marine Pilots indicate that even mega containerships could land at Adak, up to the Maersk EEE vessels. The Port of Adak is currently modeling this megaport capability to verify its safety.

PORT OF ADAK FOREIGN TRADE ZONE

Adak is seeking recognition as a Foreign Trade Zone would allow the transshipment of foreign origin cargoes without paying US import duties.

NORTHERN SEA ROUTE SHIPPING WINDOWS ARE EXPANDING

Russian announcements of construction of a new class of 65 megawatt icebreakers suggest that NSR shipping could be expanded to 7 months per year. If the ice continues to melt at an accelerating rate as is predicted, that will also expand the shipping window.

The periodic nature of NSR shipments can be ameliorated by the fact that containers are universally interchangeable. If the NSR/GCR route can be utilized for 5 months a year and save money, those containers will just go back into the Asia to Europe Suez Canal routes when the NSR is not operable

ICE CLASS CONTAINERSHIPS ARE BEING DESIGNED AND CONSTRUCTED

South Korean design of icebreaking containership. Russia and other countries are also designing and constructing ice capable containerships.

MODERN CONTAINER ID SYSTEMS WILL FACILITATE EFFICIENCIES

Modern container ID and management systems could prioritize container shipments at the Adak container sorting yard. There are 60 acres of container storage directly behind the dock operations at the proposed Adak Megaport site. Container cargoes can be prioritized for their urgency of shipping.

Some cargoes, such as perishable fruits and vegetables from the US West Coast to Europe for instance, would be considered hot cargo and loaded as a first priority. They would also pay a premium tariff. The expected 10 days shipping time savings of the NSR would make a difference in the quality of these goods. Other cargoes where the shippers do not require immediate deliveries, and where shippers are more focused on the cost savings, would be loaded on a space available basis.

PROPOSED PORT OF ADAK MEGAPORT CONSTRUCTION

The Port of Adak proposes to build a 1300 foot container dock, -60 MLLW draft, with 100 foot gauge container rails and a 61 acre container storage and sorting yard. Estimated cost is $100 million.

SUPPORTING INFRASTRUCTURE AT PORT OF ADAK

The Port of Adak has substantial existing infrastructure in housing, warehouse space, office space and fueling capability. There is a cross runway airport which is capable of landing a Boing 767. If the demand is sufficient, the Port of Adak also proposed to install an LNG fueling facility.

See Aerial photo on next page

 

PORT OF ADAK SEEKS DEVELOPMENT PARTNERS

The Port of Adak seeks to enter into discussion with potential investors, shippers and port operators to explore the potential of these new world trade routes. There has been much discussion about development of the Northern Sea Route. The Adak International Transshipment Hub is the missing link in exploiting the efficiencies of the NSR and the Great Circle Route.

For more information contact:

Paul Fuhs paulfuhs@earthlink.net 907-351-0407