OCEAN carriers who deploy mega containerships to drive down slot costs are also driving up costs for ports and truckers, says top Drewry Maritime Research analyst Simon Heaney.
'For liners, I would say the arms race has been negative overall due to the impact on freight rates and stress they have placed on networks,' he said, reported New York's FreightWaves.
'They have upside in terms of slot cost savings and lower emissions per TEU, but in general they have failed to deliver the hoped-for benefits and have denied carriers some of the flexibility required in a dynamic market.'
'Cost savings at sea are countered by higher costs at port,' Mr Heaney said. 'Drewry carried out a simulation study of the operational and financial impacts on lines, terminal operators, ports and other supply chain stakeholders as vessel size increases up to and beyond 18,000 TEU.
'The study found that scale economies from mega ships only works for the total supply chain if terminals can increase productivity in line with increases in vessel size, which they are not,' he said.
'It really depends on where you sit in the supply chain. For cargo owners, they have benefited from lower rates as these ships have added to the market overcapacity' Mr Heaney said.
'Ports and terminals have been seriously challenged by the ULCVs [ultra large container vessels] and face significant costs to upgrade facilities to handle them or see business go elsewhere.'
WORLD SHIPPING
'For liners, I would say the arms race has been negative overall due to the impact on freight rates and stress they have placed on networks,' he said, reported New York's FreightWaves.
'They have upside in terms of slot cost savings and lower emissions per TEU, but in general they have failed to deliver the hoped-for benefits and have denied carriers some of the flexibility required in a dynamic market.'
'Cost savings at sea are countered by higher costs at port,' Mr Heaney said. 'Drewry carried out a simulation study of the operational and financial impacts on lines, terminal operators, ports and other supply chain stakeholders as vessel size increases up to and beyond 18,000 TEU.
'The study found that scale economies from mega ships only works for the total supply chain if terminals can increase productivity in line with increases in vessel size, which they are not,' he said.
'It really depends on where you sit in the supply chain. For cargo owners, they have benefited from lower rates as these ships have added to the market overcapacity' Mr Heaney said.
'Ports and terminals have been seriously challenged by the ULCVs [ultra large container vessels] and face significant costs to upgrade facilities to handle them or see business go elsewhere.'
WORLD SHIPPING