From SCDigest's On-Target e-Magazine
- July 16, 2013 -
Global Supply Chain News: The First Maersk Triple E has Left the Station, er, Port
Ship will Likely Operate Less than Full, as Ports Upgrade Equipment; 22,000 TEU Ships Coming?
SCDigest Editorial Staff
The first of the massive new Maersk Line "Triple E" ships has left the port of Busan, South Korea on its maiden voyage, taking the megaship era to another level. The Triple E is designed to carry some 18,000 TEU, about 11% more than the previous largest ship.
Maersk believes it will significantly reduce operating costs per container, a critical benefit at a time when ocean carrier finances are suffering from overcapacity and relatively weak demand.
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United Arab Shipping Co. is set to order five Triple-E's as early as this month to run a joint Asia-Europe service with China Shipping Container Lines Co.
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What Do You Say?
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The first of 20 Triple E's ordered by Maersk has been named the Maersk Mc-Kinney Møller, after the parent company's founder's late son. It will be co-captained by Jes Meinertz (age 44) and Niels Vestergaard Pedersen (48). It will operate with a crew of about 22 in total, but can be operated by as few as 13, Maersk Line says.
The ships are costing Maersk Line about $120 million each.
From Busan the Triple E will head to a port in Malaysia, then on to several European ports. It will not call on any US ports.
The Triple E's can in theory hold more than 18,000 TEU, but that is with all containers on board being loaded at about 83% of capacity. The practical capacity is more often governed not by the number of containers a ship could manage, but rather by the total weight of those containers, so if they are stuffed especially full or with heavy cargo, the practical capacity will be less than 18,000.
Port limitations are also a factor. A port needs to be deep enough to handle this large of a ship, and its cranes need to be larger enough to accommodate the giant ships as well, which are 1,300 feet long and 20 stories high. Of the total of 16 ports certified to handle Triple-E size vessels at present, several do not yet operate adequate gantries.
Early estimates were that on the maiden voyage, the ship would max out at about 14,000 containers on board, and probably run at that rate for a while.
"We will operate it as a smaller ship for the first few months while ports upgrade their cranes," Lars Jensen, head of Maersk Line's Asia-Europe operation, told the Wall Street Journal this week. "You can't do much about this while the infrastructure is adapting to larger ships."
Of course, sailing at less than full capacity will provide a hit to the ship's favorable economics.
The Triple E's are also a key element of the new P3 alliance just announced by the world's three largest ocean carriers, Maersk Line, Switzerland's Mediterranean Shipping Co. and France's CMA CGM, in which the three will pool vessels and capacity.(See New Ocean Carrier Mega-Alliance May Boost Rates, Causes Concern Among Shippers.)
With Triple E's estimated to consume 35% less fuel per container than traditional ships, and other operational efficiencies, there will be an incentive for the alliance to pool demand to fill up the Triple E's.
How Big Can These Ships Get?
Is the industry close to reaching the upper limit of just how big it is practical to build and operate ocean container ships? Probably not, says Marc Pauchet, senior analyst at ACM Shipping.
(Global Supply Chain Article Continued Below)
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The efficiency of the larger ships is likely to push smaller carriers and ships out of the market.
