The Impact of Colossal Container Ships: General Overview

By November 7, 2016 Article, Technology No Comments

MSC Oscar is the World’s Largest Container Ship with 19,224TEU Capacity
Image Courtesy of Kees Torn at https://www.flickr.com/photos/68359921@N08/16520366958/
Retrieved From https://en.wikipedia.org/wiki/File:MSC_Oscar_(ship,_2014)_002.jpg

Exponential Expansion

Malcolm McLean was one frustrated man in 1937. The owner of a North Carolina trucking company, he grew wary of the process of loading ships with cargo from trucks – it took ages. It occurred to him that cranes could load truck trailers directly onto ships.

But it would be another nineteen years before McLean could put his idea into practice and build the very first container ship, the Ideal X. She was a converted tanker that could carry 58 containers. Only 58 containers by today’s standards. From then on, there was no turning back.

MSC Oscar is the largest container ship of the day and can carry 19,224 twenty foot equivalent (TEU) containers. The size of container ships has expanded faster than that of any other ship type.

Malcolm McLean: The Architect of the Container Ship  Image Courtesy of Maersk Line at https://www.flickr.com/photos/maerskline/7312751706/  Retrieved From https://en.wikipedia.org/wiki/File:Malcolm_McLean_at_railing,_Port_Newark,_1957_(7312751706).jpg

Malcolm McLean: The Architect of the Container Ship
Image Courtesy of Maersk Line at https://www.flickr.com/photos/maerskline/7312751706/
Retrieved From https://en.wikipedia.org/wiki/File:Malcolm_McLean_at _railing,_Port_Newark,_1957_(7312751706).jpg

Now, in terms of numbers they may be only one-eighth of the global fleet. But they are the real work horses of the globalized economy considering the volumes of cargo they transport.

Large ships use less fuel per unit of transported cargo as compared to smaller ships. This is the main argument in their favor. Of course, less fuel consumption means less pollution.

At the same time, mega container ships necessitate expensive upsizing of ports, cranes, transit canals, bridge heights, and river width and depth. You also need to strengthen quay walls.

Insurance for such ships comes at a steep price and salvaging them, in case of accidents, costs a fortune. Then again, the supply chain resilience of large ships is low. Using large ships is justified only if they save substantially more than what these upgrades and escalated hazards cost.

Pros & Cons

One, single mega ship of (say) 10,000TEU capacity uses less fuel then two ships of 5,000TEU capacity each. This is because the large ship:

  • Weighs less and has lesser hull area in contact with water as compared to the two small ships. This lowers the drag on the larger ship making it burn less fuel
  • Is more stable than the two small ones meaning it requires to carry less mass of ballast water. This reduces the overall weight of the ship and makes it use less fuel

In January 2015, the MSC Oscar became the largest capacity container ship in the world with 19,224TEU capacity. The CSCL Globe was the previous champion at 19,000TEU, a spot it had acquired in November 2014 and could maintain only for two months.

The CSCL Globe  Image Courtesy of Keith Skipper at https://www.flickr.com/photos/capnkeith/16036171798  Retrieved From https://en.wikipedia.org/wiki/File:CSCL_Globe_arriving_at_Felixstowe,_United_Kingdom.jpg

The CSCL Globe
Image Courtesy of Keith Skipper at https://www.flickr.com/photos/capnkeith/16036171798
Retrieved From https://en.wikipedia.org/wiki/File: CSCL_Globe_arriving_at_Felixstowe,_ United_Kingdom.jpg

Port expansion is inevitable. Those that do not, risk losing customers. Here are some prominent expansions:

  • Operator of Liverpool port, Peel Ports, is spending £300 million for building Liverpool2, a new deepwater terminal

They are also future-proofing the terminal by conducting trials with the Mediterranean Shipping Company (MSC), the proud owner of the MSC Oscar

  • Port of Long Beach is investing $1.3 billion in the Middle Harbor project to expand capacity to host 24,000 TEU ships by 2020. Total annual capacity will be 3.3 million TEUs
  • PSA Singapore is expanding the Pasir Panjang terminal to house 50 million TEUs a year with a view to be ready for 2050. Now, that is genuine foresight
  • Authorities on Canada’s East Coast are planning two container terminals in Nova Scotia for dealing with 14,000 TEU or even larger ships

 But then, mega container ships require:

  • SS Ideal X: The First Container Ship    Image Courtesy of the United States Government at https://en.wikipedia.org/wiki/File:US_T2_WW2_tanker_Hat_Creek.JPG

    SS Ideal X: The First Container Ship
    Image Courtesy of the United States Government at https://en.wikipedia.org/wiki/File:US_T2_WW2_tanker_Hat_Creek.JPG

    ports with higher capacity cranes, larger storage yards, and better inland distribution

  • greater bridge height
  • quay wall strengthening
  • upsized river width and depth
  • expansions of transit canals such as that of the Panama Canal
  • better safety measures
  • more expensive insurance

Ports also have to deal with more intense traffic peaks when dealing with colossal ships. All this has ensured that there are, at present, only twenty ports that can host 19,000TEU container vessels.

These are: Rotterdam, Antwerp, Singapore, Hamburg, Aarhus, Gothenburg, Bremerhaven, Wilhelmshaven, Shanghai, Busan, Dalian, Qingdao, Xingang, Yantian, Ningbo, Gdansk, Kwangyang, Tanjung Pelepas, Xiamen, and Felixstowe.

June 26, 2016 saw the completion of the $5.25 billion Panama Canal expansion. Despite the upsizing, this vital link between the Atlantic and the Pacific can support only 13,000TEU to 14,000TEU container vessels.

Panama Canal Schematic   Image Courtesy of Thomas Romer / OpenStreetMap data at https://en.wikipedia.org/wiki/File:Panama_Canal_Map_EN.png

Panama Canal Schematic
Image Courtesy of Thomas Romer / OpenStreetMap data at https://en.wikipedia.org/wiki/File:Panama_Canal_Map_EN.png

 

Availability of capital and space for expansion decide whether a port can expand or not. Most ports are located in bustling cities that are simply incapable of allotting any more land for port expansion.

Container ships will not be viable above a particular size. Cost savings of the latest generation container ships are 4-6 times smaller than those from the previous round of upsizing.

And, 60% of the cost savings for latest container ships come from using more efficient engines, not a consequence of larger size. Further improvements will require innovative hull designs, superior hull designs, and the use of large number of smaller engines.

Sluggish economic growth means global shipping remains plagued with overcapacity. The order books of most shipbuilding yards are contracting and operators are slow steaming i.e. running ships at below rated speed to cut fuel costs. Not the time to order gigantic ships, is it?

Engineers will soon have to deal with peculiar structural weaknesses observed in recent shipwrecks of large container ships. Transport networks are more complex and interconnected than before and secondary routes have to absorb the shipping capacity displaced by colossal container ships.

Aerial View of the Suez Canal    Image Courtesy of the United States National Aeronautics and Space Administration at https://en.wikipedia.org/wiki/File:SuezCanal-EO.JPG

Aerial View of the Suez Canal
Image Courtesy of the United States National Aeronautics and Space Administration at https://en.wikipedia.org/wiki/File:SuezCanal-EO.JPG

Such complexity adds to the cost and intricacy of insurance. And any accident of mega ships would mean greater pollution and more expensive salvage operations.

Because they concentrate cargoes and services, the supply chain resilience drops – the mishap of a large ship affects the supply chain more than does the accident of a smaller ship.

Currently, ships lose over 10,000 containers to sea every year. Large ships will lose more until technicians come up with better fasteners. Lost containers also present a collision hazard for smaller vessels.

Withering of the Age-Old City-Port Link?

Since the 1960s, academics and sections of the shipping community have debated the weakening of the city-port relationship. Containerization of maritime trade and internationalization of port operations have lowered the dependence of the:

  • port on city’s labor and services
  • city on the port for economic growth and employment generation

Crammed cities can no longer offer precious real estate for port expansion even as port operations add to urban congestion and pollution. Ports are therefore moving away from urban areas. This runs contrary to the centuries-old, mutually beneficial relationship between them.

Despite fresh forces potently sabotaging the historical relationship, most ports are still located within urban environs and continue with the mutually profiting relationship. The point to the city-port divorce is still miles away.

Finally

Mega ships will be most likely used on large volume, long haul routes such as Shenzhen-Long Beach or the Shanghai-Rotterdam route rather than on the West Coast South America to East Coast North America routes.

The issues with the use of mega ships will be a nightmare for legislators, regulators, and other government bodies who have to devise ways to incorporate rapid changes into the legal-regulatory systems. And shipping companies and crews will have to fight old habits that die hard.

Countries and ports base decisions on individual requirements. The consequences of these however may not be fruitful for the collective whole. Stakeholders around the world need to adopt an integrated approach. After all, isn’t shipping among the most globalized of industries?

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