'Brexit created opportunities, Belgium will capitalise on them'
Belgium’s ambassador to the UK, Bruno van der Pluijm, has urged British business to consider ...
Ultra-large container vessels (ULCVs) are neither beautiful or desirable, and even their green credentials are being questioned, delegates at ICHCA’s cargo handling conference in Barcelona heard yesterday.
The OECD’s Olaf Merk told the Bigger Ships, Greater Challenges conference that the doubling in size of containerships in the past decade had led to a “vicious circle” of bigger ships, fleet overcapacity, lower freight rates and, thus, the need to cut costs further.
The Mega-XL model of containerships does bring economy of scale if they are full, conceded Mr Merk, but he said doubling in size had also put significant additional pressure on ports and terminals.
He questioned whether ULCVs were in the best interests of anybody other than the carrier.
“Do we really want a system where mega-ships only bring cargo to mega-ports?” asked Mr Merk.
He used the analogy of having just one meal a day, with everyone going to the same restaurant to eat.
Mr Merk also argued that the hub & spoke operation was negating the eco-friendly advantage of ULCVs by requiring more ship miles per box because of feeder operations, and/or by the unplanned discharge of cargo at alternative ports due to congestion.
Chris Welsh, secretary general of the Global Shippers Forum, agreed that the time was right to reassess the cost of the increased use of mega-ships. He expressed concern that of the top 22 biggest carriers, 21 are members of the four east-west mega-alliances, in his view restricting the service choice for shippers.
“The onus is on the shipping industry to demonstrate that the bigger ships and alliance business model is the best response to the economic and financial challenges faced by carriers, but also adds value to customers,” he said, warning: “If they restrict choice … then other regulatory or competition policy approaches may be necessary.”
Increasingly, he noted, shippers were facing unexpected supply chain disruption and extra cost, due to the strategy of alliances to blank sailings – often at short notice – and the bunching of big ships, causing peaks and troughs and landslide congestion.
Shippers have also voiced concerns that bigger vessels result in a greater percentage of containers being shipped together, thus increasing the risk of an incident for businesses awaiting inventory. There have been two cases of ULCVs going aground in the past month, with potentially big delays to cargo delivery, averted only by the prompt – if costly – response from salvage teams.
Another speaker noted that the average exchange on a containership five years ago at the port of Antwerp was between 2,000 and 2,500 boxes. That figure now averages 6,000-7,000 containers per call.
EU heavy goods vehicle restrictions at the weekend, in addition to three ULCVs scheduled between Friday and Sunday, could also mean a substantial number of vehicles vying for the same road space around the port on a Monday morning.
“The infrastructure at ports cannot cope with such large peaks,” he said.
Mr Welsh renewed his call for all the “actors – shippers, carriers, terminal operators etc –to sit around the table”. He said that it was necessary to exchange ideas to overcome problems stemming from the deployment of ULCVs on the major tradelanes and the cascading of the incumbent ships onto smaller routes.
However, the signs are not good: the organisers confirmed that carriers had been invited to the conference but, with the exception of one Maersk executive who is also chair of the CINS (Cargo Incident Notification System), no other lines were in attendance on day one.