The Red Sea crisis and its impact on containership deployment
The impact of the Red Sea crisis on containership deployment trends – after a wave ...
© Krzysztof Janczewski
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 ...
Comment on this article
Andy Lane
March 03, 2016 at 7:16 amBased on data provided by 12 of the 16+1 Lines in the 4 major Alliances, the average quantity of moves per ship call in Antwerp in 2015 was 5% up against 2014 at 1,154. This number excludes all barges and smaller feeders which are not directly operated by the Alliance members, so in reality the average call size is below 1,100 moves/call.
As a global average, the average call-size decreased in 2015 versus 2014 in all regions except for Africa. Productivity in all regions decreased, and productivity weighted by call-size decreased in all except for North Europe. Productivity is in relative decline!
Within the 4 Alliances there are 17 completely independent commercial entities, without the Alliances this number would be ever decreasing (bankruptcies, M&A, etc). The Alliances offer the choice of 15+ different products per trade-lane, at historically low prices. Each Alliance member offers more direct port-pair products than they could if they were not in Alliances.
Hub & Spoke has always and will always exist, the Hub & Spoke out-fed ports today are pretty much the same as they were 10 years ago and will be 10 years into the future. New direct ports of call by deep-sea vessels recently are Ho Chi Minh and Gdansk, but no previously direct port has been “relegated” to Hub & Spoke.
The bitterness of low quality lasts way longer than the sweetness of low price!
We can idly bemoan larger ships and Alliances, or we can adjust our business models to cater for them, the former does not really add any value as you cannot change history. We must use objective facts and not pet-hates or cognitive biases to add any value from any discussion.
Mike Wackett
March 04, 2016 at 8:27 amThanks for putting the other side of the coin Andy.
I agree with you that we can’t turn the clock back: the big ships are already in service and more are being delivered every day.
However, there is an issue concerning the suitability of the big ships for trades.
CMA CGM’s announcement yesterday that it will deploy 18,000 teu ships between Asia and the USWC is sure to fuel the fire.
Andy Lane
March 04, 2016 at 10:57 amYes Mike, I did not see the latest CMA deployment coming for sure. I hope that they will be able to fill 18,000 TEU per week, and that such a large service does not reduce the frequency and quality of the existing O3 Trans-Pacific network.