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Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Global Shipping on the Rise

No U.S. port can currently house the new mega-ships traveling the world's seas. 

| BY Kent McDill

The global shipping industry is getting larger, and bigger, and more massive, all at the same time.

What was an industry that lost many competitors as a result of the 2008 recession is now seeing companies building massive ships to handle the overload of goods available to be shipped from one port to the next.

The United States, meanwhile, is struggling to keep up with all the changes going on in the global shipping industry as Eastern seaboard ports struggle with the costs and space considerations required to handle the bigger ships.

The recession forced many worldwide shipping companies to fold, and severely cut the prices shippers could charge to move product. But the industry has recovered, as Chinese, Greek and Western European companies are ordering new and much larger ships and companies with product to move are seeing the costs of shipping remain low.

The Denmark company Maersk has already built the Maersk McKinney Moller, a ship that is 240 feet high, 1,300 feet long and 200 feet wide. It can carry enough crates to move, for example, two million bicycles at one time. The ship can carry more than 18,000 standard 20-foot containers, approximately twice as many as other older ships can carry.

That’s 70 miles worth of crates on one vessel.

Maersk has also ordered 20 more such ships from their builder at a cost of $185 million apiece.

However, the key for these massive ships is being able to sail with a full inventory of product. Anything less than a full load of materials becomes cost prohibitive for the companies operating the massive vessels.

The proliferation of big boxes stores such as Wal-Mart, and the need to fill those stores with product from around the globe, has recharged the global shipping industry. The larger vessels that can move more product in a single voyage are a cost-effective alternative to more ships running less product.  

As of March 2014, no United States port could handle a ship the size of the McKinney Moller. It sails between Asia and Northern Europe, where a port in Poland can handle the enormity of housing the ship and loading it with new materials.

Several European ports, as well as many American ports, are dredging to new depths and upgrading their loading equipment in order to load and unload containers from the larger vessels. American ports are also increasing their warehouse inventory to house the goods before they are loaded onto trucks.

In an attempt to catch up, China is building new terminals at a steady and hastened pace to handle the big rigs.

The Panama Canal, once the world’s most significant shipping construct, is finally ready for a massive expansion to handle the ocean’s new vessels. A third set of locks are set to be built at the Panama Canal, with an expected completion date of December 2015. The expansion, which has been stymied by cost overruns and payment issues, are needed to handle the larger ships in order to transport goods from the Atlantic Ocean to the Pacific Ocean and back again. When complete, the Panama Canal will have doubled its capacity for ship transfers.

In order to be cost-effective, the new massive ships travel at 2 to 3 knots slower than smaller cargo ships, a maneuver which cuts fuel costs in half as well as drops the amount of C02 emissions.

 

The effort in the United States to be a part of the new mega-ship business is unprecedented, and necessary.

According to Richard Meade, managing editor of shipping industry news provider Lloyds List, American ports are working almost as hard as the Chinese to get up to speed so they can handle the size of the ships and the payload they are hauling.

“They don’t want to be effectively designated as the backwater of global trade simply because they can’t now accept the global standard,’’ Meade told National Public Radio.



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.