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Shippers, ports attack mega ships for high costs, infrastructure constraints

MAERSK Line's chief operating officer Soren Toft has questioned the wisdom of mega ships now that cheap time charters and low fuel prices have wiped out the economies of scale they were supposed to provide, reports IHS Media.

Shippers, ports attack mega ships for high costs, infrastructure constraints
11 March 2016 - 08:45
Shippers, ports attack mega ships for high costs, infrastructure constraints
MAERSK Line's chief operating officer Soren Toft has questioned the wisdom of mega ships now that cheap time charters and low fuel prices have wiped out the economies of scale they were supposed to provide, reports IHS Media.
"If you order a new crane today, it will take two years to arrive," Gunther Bonz, president of the Federation of European Private Port Operators (Feport), told the International Cargo Handling and Coordination Association (ICHCA) conference in Barcelona with its "Big Ships, Big Challenges" theme.
The investment in bigger cranes to handle monolithic ships - US$110 million for two berths - isn't only a problem for the leading terminals, but for smaller ones as they are now attracting 19,000 TEUers on main east-west routes.
Containerships of 14,000 TEU will shortly be deployed on the Africa and South America trade lanes, noted the administrator of ports and shipping at Organisation for Economic Co-operation and Development (OECD), Olaf Merk. "The worst is still to come ... with most mega vessels not yet built," he said.
The average number of container moves per vessel in Hamburg has jumped within five years from 2,000 to 2,500 to between 6,000 and 7,000 at present, resulting in a significant impact on landside and hinterland operations, said Feport's Mr Bonz. 
As trucks are banned from the roads on Sunday, the arrival of three mega-ships, each with 6,000 moves, over the weekend will result in 25,000 trucks going to and from the port on Monday morning - up from 10,000 three to four years ago.
The deployment of mega ships is creating a hub-and-spoke system with calls restricted to a shrinking number of mega ports. "It makes more sense to share increasing traffic transported by the larger ships among more ports," Mr Bonz said. "I don't believe the mega-port is the correct approach."
The developing hub-and-spoke system in Europe relies on heavily subsidised hinterland corridors from the largest ports and not all costs are recovered, according to Mr Merk. 
This means that taxpayers are paying for trucks to go 1,000 kilometres inland carrying cargo that could have been shipped through nearer ports.
Worse still is Europe's hinterland infrastructure is not capable of handling the growing number of mega ships and needs to build more railways and highways, said Mr Bonz. 
"This needs lots of time and lots of money, as planning approval for 100 kilometres of rail track takes at least five years due to European Union environmental regulations, before construction can commence," he said.
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