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The benefits ultra-large containerships vs port congestion and surcharges

Last week saw the naming of the latest behemoth of the seas the 19,000 teu CSCL Globe, the largest containership ever built, and there are plenty more ultra-large boxships more to follow.

Marcus Hand, Editor

November 24, 2014

2 Min Read
Kalyakan - stock.adobe.com

The size war that has broken out in container shipping has far surpassed even what most expected. A decade ago if you had suggested that at the end of 2014 a 19,000 teu newbuilding would be joining many existing 16,000 – 18,000 teu ships in the global container fleet, you would at best have been branded a dreamer.

But in the world where economies of scale and unit cost are king the ultra-large containership has very easily won out. Classification society officials believe that before long someone will take the plunge on the 24,000 teu containership with a number of designs already on the drawing board.

However, while the economies of scale certainly work for the container lines, you would probably find many ports disagreeing. Some have simply been unable to keep up as the massive vessels steam out of the yards just eight months after work has started on building them.

Yes, you can deploy lots of cranes on the vessel to load or offload 5,000 to 8,000 teu as fast as possible, but the issue comes further behind in the container yard, connections to railheads, the capacity of customs to deal with all the boxes and other landside issues. Commenting to Seatrade Global on port congestion Maersk Line’s chief executive for the Asia Pacific region Lars Mikael Jensen said: “I don’t necessarily think port congestion is just the result of big ships. There is no doubt some terminals are better prepared than other others to take big ships.”

While big ships may only be part of the equation it does not change the fact that congestion has been seen in Europe, the US, and previously believed to be bullet- proof Asian ports. Things in the US, which does not even see the largest ships calling its ports, have been worsened by labour unrest. The result – a congestion surcharge, at up to $1,000 per feu from Asia to the US.

Last week Federal Maritime Commissioner William Doyle pointed size has started to outstrip ports’ ability to cope with the changes, and he also stated lines should not charge congestion surcharges under “any circumstance”.

There is a very interesting conflict coming here – container lines have been investing billions into ultra-large ships to reduce cost, while ports are running behind as its harder for them to justify the investment and it takes longer to implement. Meanwhile shippers and the regulatory bodies will rail at congestion surcharges from shipping lines as they don not see why the customer should be penalised financially, on top their cargo be delayed in the first place.

A very rocky road could lie ahead between lines, ports, regulators and shippers as the full ultra-large containership fleet takes to the world’s oceans.

 

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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