Home' Ships and Shipping : April 2011 Contents © BAIRD PUBLICATIONS LTD 2011
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Not more than a year ago many people in the industry were muttering in their
drinks that 13,000 or 14,000 TEU container ships were unjustifiably and
I wonder what they think now. The world’s largest container operator, Maersk,
which is also delightfully profitable, has just announced an order for ten 18,000 TEU
ships from Korea’s Daewoo Shipbuilding and Marine Engineering. It also holds options
for as many as 20 more.
At USD 180 million each, that is a big investment but, compared with the cost per
container slot of, say, a 2,500 TEU ship it is peanuts. These ships are all about
economies of scale. In that they are no different from 5,000 passenger cruise ships or
300,000 DWT tankers and bulkers.
Of course, as with their counterparts in other trades, their size brings with it certain
disadvantages. They certainly will not fit in to many ports. They are only suited to truly
mainline trades and, very importantly,they require high capacity terminals designed to
load and discharge them quickly and economically.
As with fast ferries, for example, there is not much point in averaging 40 knots over
the ground if inadequate terminals reduce the door-to-door times to the same as those
for their 20 knot competitors. Terminals and access to the hinterland must be just as
efficient as these huge new ships.
As most of us are aware, Maersk is a very clever company. It would not have become
the largest and most profitable in its industry sector if it were not. We can safely
assume, therefore, that it knows very well what it is doing. It will have the routeing
and terminal arrangements for these “Maersk Mammoths” well worked out already.
That should not be a problem with mainline ports such as Rotterdam, Marseilles,
New York, Los Angeles, Tokyo, Shanghai, Pearl River and Singapore but it will be a long
time coming to second or third division harbours.
This dramatic and brave announcement from Maersk is certain to set off an “arms
race” among container carriers. It seems certain that Maersk’s many competitors will
soon be announcing equal sized or larger ships.
The usual suspects have gasped and guffawed over this order. In the next few weeks,
inevitably, when the highly paid but not very bright professionals in the global green
movement learn of it, we will hear the usual condemnation of progress.
We will need to remind such doubters and “knee jerk” opponents that the laws of
unintended consequences normally work in favour of such bold moves in shipping.
Ships that are more economical per cargo tonne mile are also, inevitably, more
environmentally efficient. In other words they emit fewer nasties to foul our oceans
Because of their large size and high capital cost they tend also to be inherently more
seaworthy and, generally, better handled. They attract high quality commanders and
crews. It’s all obvious when you think about it but the thought processes of Luddites
tend not to be very logical.
Despite the best efforts of the Luddites in the green and various union movements,
world trade continues to grow inexorably. While a manufacturer of televisions or
refrigerators or furniture in China will not be overly concerned with the environmental
side effects of their journey to Europe, he will be delighted if his freight costs are
reduced thanks to travelling on a larger ship. He may still feel a warm inner glow,
though, if he knows that the emissions resulting from the transit of his products are
reduced by their carriage on a larger vessel.
Using these large new ships will result in profitable spin-offs for the owners of the
feeder ships that will be required to move their cargoes to and from smaller and
So, despite the inevitable outcry, this is one arms race that should be good for both
the planet and the global economy.
A container shipping arms race?
EDITORIAL APRIL 2011
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