Japanese ports sustain major damage,some out for months

Mon Mar 14, 2011 8:44am GMT

* Ports in Tokyo, south of capital resume normal ops
* Japan assesses damage to ports north of Tokyo
* Closure of ports to cost Japan $3.4 bln per day

By Chikako Mogi and Randy Fabi

TOKYO/SINGAPORE, March 14 (Reuters) - Japanese ports handling as much as 7 percent of the country's industrial output sustained major damage from last week's earthquake, disrupting
global supply chains and causing billions of dollars in losses, industry officials said.

Japan has begun assessing the damage to port infrastructure, vital to receiving aid, commodities and goods for rebuilding areas devastated by the 8.9 magnitude quake and tsunami that are
likely to have killed more than 10,000 people.

The box shipping industry was seen as the most strongly affected by the disaster as the destroyed ports handled containerised cargo for Hitachi Ltd. , Daikin Industries, and dozens of other companies.

"The short-term impact on economic activity could be greater than after the Kobe earthquake," said Jiyun Konomi, Tokyo-based analyst with Nomura Securities, referring to the 1995 disaster
which killed 6,000 people.

"Following the Kobe earthquake ... activity did not return to pre-earthquake levels within three months for freight transportation."

Tokyo and all ports south of Japan's capital were operating normally after briefly shutting down operations following Friday's disaster, while the rest of the country's ports were being assessed for damage, a shipowner and port official said.

"Ports south of Tokyo are all operational, ports north of Tokyo are still under evaluation," said a shipowner based in Tokyo.

The closure of the ports was expected to cost Japan more than $3.4 billion in lost seaborne trade each day, according to shipping trade publication Lloyd's List Intelligence. Maritime trade in the world's No. 3 economy totalled $1.5 trillion last year.

WORST HIT

The northeast coast ports of Hachinohe, Sendai, Ishinomaki and Onahama were so severely damaged by Friday's disaster that they were not expected to return to operation for months, if not years. The ports were medium-sized facilities that handled mostly containers, but also some fuel products and dry bulk goods.

"These ports will need a lot of time until they can be fully restored," said Tetsuya Hasegawa, operation manager at Heisei Shipping Agencies in Tokyo, told Reuters.

Japan's ninth-largest container port, Kashima, and the smaller port of Hitachinaka sustained milder damage and both could be back in operation within weeks, he said.

The tsunami also destroyed dozens of vessels, including three of Kawasaki Kisen Kaisha's panamax ships.

The disaster was expected to delay oil shipments and cause major port congestion.

"Our channels indicate that crude currently en route to Japan will likely be discharged in India or elsewhere in Asia, with the refined products carried on to Japan once ports re-open," said Michael Webber, analyst at Wells Fargo Securities.

Grains shipments, however, were not yet affected following the quake.

"Of Japan's some dozen major ports where bulk carriers or tankers can dock, only two are damaged," said Nobuyuki Chino, president of Unipac Grain.

"Imports of grain to Japan therefore are not affected."
(Additional reporting by Luke Pachymuthu; Editing by Clarence Fernandez, sourced:Thomson Reuters)