International liner shipping is a sophisticated network of regularly scheduled services that transports goods from anywhere in the world to anywhere in the world at low cost and with greater energy efficiency than any other form of international transportation.
Liner shipping is the most efficient mode of transport for goods. In one year, a single large containership might carry over 200,000 container loads of cargo. While individual ships vary in size and carrying capacity, many container ships can transport up to 8,000 containers of goods and products on a single voyage.
Similarly, on a single voyage, some car carrier ships can handle 7,600 cars. It would require hundreds of freight aircraft, many miles of rail cars, and fleets of trucks to carry the goods that can fit on one large liner ship. Learn more about the efficiency of liner shipping.
As the world economy grows faster than ever before, the shipping industry has no choice, but to catch up with the speed of change. Over the years, strong demand for international trade has led to an increase in the size of shipping vessels. This maximizes the benefit for economies of scale.
In the past, “Megaships” were built to address the demand for larger container vessels. However, as economies grow ever more rapidly, a larger generation of container ships will be needed: ultra-large container ships. The capacity of ultra-large container vessels currently ranges from 14,000 TEUs to 21,000 TEUs. This capacity is nearly two times more than the most commonly-used vessels.
IN 2018, A RECORD HIGH AMOUNT OF ULTRA-LARGE CONTAINER SHIPS ARE EXPECTED TO TAKE THEIR PLACES IN OCEANS.
ADVANTAGES OF ULTRA-LARGE CONTAINER SHIPS
- Larger vessel sizes are expected to drive a boom in overall demand. The increasing popularity of ultra-large container ships is expected to increase so-called “seaborne trade.”
- Huge export volumes from countries will increase demand for creating more plants in several countries. This will also drive demand of sourcing out raw materials.
- Ultra-large container ships will also benefit transpacific shipments, helping to contribute to the progress of developing countries.
- In the sense of economy of scale – with the larger capacity, more containers will be carried with less number of vessels, leading to a decreased environmental impact.
DISADVANTAGES OF ULTRA-LARGE CONTAINER SHIPS
- Port limitations is one of the most immediate challenges that ultra-large container ships may face. Larger vessel sizes may lead to longer wait times at loading, trans-loading, or discharge ports.
- Larger sizes will result in more complex operational processes. (Placement, distribution, and handling of the containers)
- Complex and hard operational processes may lead to increased risk for operators and owners.
- Increased cargo space may force carriers to reduce prices from time to time, in order to maximize vessel capacity efficiency, especially in less busy seasons. This situation may result in price fluctuations throughout upcoming years.
Having the many advantages discussed above in mind including economies of scale, they have many challenges need to be considered and analyzed as well.
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.
The industry 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.
The Way Ahead
Liner shipping connects countries, markets, businesses and people, allowing them to buy and sell goods on a scale not previously possible. Today, the liner shipping industry transports goods representing approximately one-third of the total value of global trade.
Additionally, as a major global enterprise in its own right, the international shipping industry is responsible for millions of existing jobs and plays a crucial role in stimulating new jobs. It contributes hundreds of billions of dollars to the global economy annually thereby increasing gross domestic product in countries throughout the world. Moreover, as the lifeblood of global economic vitality, ocean shipping contributes significantly to international stability and security.
Ocean shipping is the most carbon-efficient mode of transportation and produces fewer grams of exhaust gas emissions for each ton of cargo transported than air, rail, or road transport. In addition, new International Maritime Organization regulations establish strict standards for vessels’ NOx, SOx, and particulate matter emissions. Also, the millions of containers that are used around the world are now 98 percent recyclable.
(References:BIMCO, More Than Shipping, Seatrade-Maritime, World Shipping Council, IMO)
Sea News Feature, June 12