Pursuing economies of scale with mega ships a mug's game: DNV GL man
LINER companies deploying ever-larger containerships demonstrate their ceaseless quest for economies of scale risk playing into the hands wily shippers, says a Seatrade Maritime commentary.
Classification soceity DNV GL vice president Jan-Olaf Probst said that a 20,000-TEU vessel costs US$145 million and probably requires main engine power of 51,000 kW.
It provides capacity equivalent to two 10,000 TEU ships which currently cost about $89 million and have engine power of 36,000 kW each.
From an operational and environmental perspective, therefore, one large vessel is more efficient than two smaller ones.
So why is it proving so difficult for mainstream carriers to raise rates? Mr Probst points to the Shanghai Containerised Freight Index (SCFI), which reveals a steady decline in rates since 2009.
One obvious reason, of course, is the steady build-up of containership capacity and the resulting tonnage surplus which exists today. But some believe other factors could also be at work.
It is suggested that leading carriers have had to adjust their business models as they face the challenge of filling one ultra-large vessel on one sailing, rather than two smaller ones at different times. Of course, carriers hope that a substantial volume of capacity will be filled with cargo booked on medium- and long-term contracts with shippers.
But achieving satisfactory load factors on mega-ships is essential to their economics and also requires a significant drive to win more short-term and spot cargoes, often at the last minute and at discounted rates.
Wily shippers, some suggest, may be realising that if they wait long enough, they could benefit from discounted rates and cheaper ocean shipping.
LINER companies deploying ever-larger containerships demonstrate their ceaseless quest for economies of scale risk playing into the hands wily shippers, says a Seatrade Maritime commentary.
Classification soceity DNV GL vice president Jan-Olaf Probst said that a 20,000-TEU vessel costs US$145 million and probably requires main engine power of 51,000 kW.
It provides capacity equivalent to two 10,000 TEU ships which currently cost about $89 million and have engine power of 36,000 kW each.
From an operational and environmental perspective, therefore, one large vessel is more efficient than two smaller ones.
So why is it proving so difficult for mainstream carriers to raise rates? Mr Probst points to the Shanghai Containerised Freight Index (SCFI), which reveals a steady decline in rates since 2009.
One obvious reason, of course, is the steady build-up of containership capacity and the resulting tonnage surplus which exists today. But some believe other factors could also be at work.
It is suggested that leading carriers have had to adjust their business models as they face the challenge of filling one ultra-large vessel on one sailing, rather than two smaller ones at different times. Of course, carriers hope that a substantial volume of capacity will be filled with cargo booked on medium- and long-term contracts with shippers.
But achieving satisfactory load factors on mega-ships is essential to their economics and also requires a significant drive to win more short-term and spot cargoes, often at the last minute and at discounted rates.
Wily shippers, some suggest, may be realising that if they wait long enough, they could benefit from discounted rates and cheaper ocean shipping.