The blockage of a crucial global trade route, which was built in the mid-19th century, by a modern 220,000-ton vessel while the Empire State Building is high, has raised questions about the industry’s dependence on it. ‘regard to these huge ships.
Rescue experts were still working to bail out Ever Given on Sunday after he got stuck across the southern entrance to the Suez Canal last week, leaving around 330 stranded ships on either side and sending tremors to global supply chains.
Shipowners accelerated the adoption of larger and larger ships to cope with the continued expansion of world trade in the 1990s. The largest container ships have quadrupled in size over the past 25 years.
“We have witnessed a continued frenetic race in container shipping over the past decades to build larger ships,” said Stefan Verberckmoes, senior shipping analyst at industry consultancy Alphaliner.
Economies of scale
The larger ships have the capacity to carry 24,000 20-foot containers, enough to travel 90 miles if loaded onto a single-deck train. But there is a debate within the industry as to whether the ships have exceeded the infrastructure necessary to support them.
Executives at AP Moller-Maersk and Hapag-Lloyd, two of the world’s largest container groups, have both said the latest container ships are the right size to meet global freight demand.
“This is an unfortunate incident,” said Rolf Habben Jansen, Managing Director of Hapag-Lloyd. “I don’t think that should lead us to the conclusion that the ships are too big.”
Ships of this size are both more efficient and more environmentally friendly, he said. The sheer size of modern container ships means they are estimated to be two and a half times more fuel efficient than rail and seven times more than road, according to the World Shipping Council.
Maritime analysts agree that the frequently enlarged Suez Canal should be able to accommodate such large vessels. But the larger container ships have reached the physical limits of length: stacking containers higher makes these ships more susceptible to high winds, while stacking them wider can increase hydrodynamic forces that make them more difficult to steer through spaces. restricted, such as ports and channels.
Big ships need big ports
Ships have fought for profitability over the past decade, largely because they often sailed half empty, prompting consolidation and alliances to pool resources.
The larger ships are unable to serve as many ports as the smaller ships. Shipping goods to major ports for further shipment raises doubts about the cost reduction proposal for larger ships. Insurers say they generate a disproportionately higher cost when things go wrong.
Some believe the problems run deeper. The grounding of the container ship in the Suez gave rise to reflection on the growing mismatch between land and sea infrastructure.
At the start of the coronavirus pandemic, businesses cut back on services in the face of declining demand. But as American consumers started ordering products they couldn’t buy from online stores instead, empty containers to transport them were not where they needed to be – China.
While inland facilities have faced challenges ranging from workers sick with Covid-19 to border restrictions, transport bottlenecks have been exacerbated as it takes a long time for ports to unload and reload more than 10,000 containers of huge ships.
The giant jets of the seas
Marc Levinson, a container historian, said shipowners bear a significant responsibility for the mess in global supply chains because of their search for ever larger ships.
“Their attitude was, ‘We will do what is best for us and ignore the rest of the logistics industry,” he said. The larger ships “worked when the ships were at sea, but totally fouled the land side of the transport system.”
Large ships will once again increase traffic jams as the chain of disruptions caused by the Suez accident unfolds.
Soren Skou, Managing Director of Maersk, said huge ships had been navigating the Suez Canal for “years and years” and the 220,000 tonnes Ever Given had stuck at the narrowest point of the waterway. .
“The widebody Boeing 747 has been the biggest in many decades. This was the optimal compromise between cost per seat and negotiability. This is where we are at, ”he said.
Hapag-Lloyd shows little sign of reduction. In December, it pledged to spend $ 1 billion on six ultra-large container ships powered by liquefied natural gas.
Still, the industry seems to have at least taken note. The order book shows that shipowners are starting to reduce the size of their workhorses from world trade to ships of around 15,000 containers. Lars Jensen, Managing Director of SeaIntelligence Consulting, said: “We are seeing a slight backward movement”.