Search By Topic The Green Supply Chain Distribution Digest
Supply Chain Digest Logo

Category: Global Supply Chain

Global Supply Chain News: Did Container Carriers Overshoot Optimal Megaship Design?


Market Changes and Other Factors Mean 18,000 or more TEU Ships May not Make Sense, but Lots of them on Water Now

Aug. 12, 2019
SCDigest Editorial Staff
The megaship era in ocean container carriers began in 2005 and 2006, when for the first time ships capable to handling some 12,000 TEU in terms of capacity were ordered be several carriers, for delivery within a couple of years.

Then a few years later, carriers upped the megaship ante again, with ships with TEU capacity of 14-15,000 TEU. For example, in December 2008, Mediterranean Shipping Company (MSC) took possession of the MSC Daniela, with the capacity of almost 14,000 TEU.

Supply Chain Digest Says...

The use of the most giant megaships causes operational issues that are leading to a reduction in container shipping reliability.

What do you say?

Click here to send us your comments
Click here to see reader feedback

The current phase of the new megaship era can arguably said to have started in 2011, when Maersk Line announced it had placed an order for 10 new cargo ships capable of handling 18,000 TEU, a substantial increase from the 15,000 or so TEU vessels that had come to market just the few years before that and that were themselves consider astonishing giants by shippers and carriers alike.

Since then, the market has seen capacities of over 19,000 TEU come to market, with talk we might 22,000 or more TEU ships before long.

The goal: gain costs synergies by increasing fixed and variable costs at a low rate than the increase in container counts, reducing the cost per container, at a time when the container sector continues to struggle to make profits.

However, container carriers may have overestimated the optimal size of such ships.

Publication The Loadstar recently did some analysis, and found that emerging trade patterns towards more regional production and the current trade wars means 18,000+ TEU ships may simply be too big.

The large ships also continue to be criticized by ports and shippers for causing congestion and other delays when unloading.

"It's a step too far and leads to a balance where you have too few weekly services and too many congestion issues at ports and hinterland," Lars Jensen, CEO of SeaIntelligence Consulting, told The Loadstar.

(See More Below)


Learn More about Softeon's Innovative Supply Chain Solutions




Jensen believes that if the carriers had stopped at the 14-15,000 TEU range there would be more efficient container networks and more frequent services with higher reliability.

Ships in that 14-15,000 TEU range are more versatile. For example, they can be used on all the deep sea ports, as well as in the Panama Canal and increasingly in secondary ports, where the larger ships often cannot enter.

And as Chinese exports slow or even decline and those container volumes are spread across a number of other Asian countries, the reduction in concentrated volumes out of China means carriers could have trouble filling the largest ships.

What's more, the use of the most giant megaships causes operational issues that are leading to a reduction in container shipping reliability.

According to analysis from SeaIntelligence Consulting, carrier schedule reliability fell to record low levels in 2018, certainly in part due to increased use of 18,000+ TEU vessels (many ports say weather was the key factor).

Larger ships also mean less frequency sailings in most cases, reducing flexibility for shippers and importers.

However, even if carriers someday recognize they may have overshot the optimal size for new ships, there are more than 150 ships of 18,000 or more TEU capacity on the seas – and they will all keep sailing for many years.

Do you think the 18,000+ TEU ships are not efficient? Let
us know your thoughts at the Feedback section below.


Your Comments/Feedback




Follow Us

Supply Chain Digest news is available via RSS
RSS facebook twitter youtube
bloglines my yahoo
news gator


Subscribe to our insightful weekly newsletter. Get immediate access to premium contents. Its's easy and free
Enter your email below to subscribe:
Join the thousands of supply chain, logistics, technology and marketing professionals who rely on Supply Chain Digest for the best in insight, news, tools, opinion, education and solution.
Home | Subscribe | Advertise | Contact Us | Sitemap | Privacy Policy
© Supply Chain Digest 2006-2019 - All rights reserved