Vessel cascading has been an ever-present feature of container shipping since liner executives first understood the benefits of economies of scale and began the box ship capacity arms race.
Key areas
According to Drewry Maritime Advisors’ Director of ports, Neil Davidson, over the years only a few areas are likely to be benefitted by this movement.
Mr.Davidson also suggested that, with an outstanding order book of some 130 vessels of over 10,000 teu still to be delivered, the main areas that cascading could take place would be the North American Pacific coast.
There the maximum vessel size is expected to grow from 14,500 teu to 18,000 teu, and the west Mediterranean, where it is forecast to grow from 14,000-16,000 teu to the 18,000-22,000 teu range.
Does vessel size matter?
Other trades where smaller vessels continue to be deployed – for example, the Australian trades this year saw its first 8,600 teu vessel call – would continue to be constrained by port dimensions, he said.
However, he suggested that the most recent increases in vessel size – the largest ships growing from the 18,000 teu Maersk Triple-E, to the 23,5000 teu vessels currently under construction – could well be the last box ship size increases for a considerable period.
He added, “Our analysis is based on the order book, and although there are some units of 23,500 teu under construction, in terms of length and beam, they are not dimensionally larger. In fact, the impact of ULCVs on the wider supply chain suggests that the maximum vessel size may have to be large”.
Reason for congestion
The cause of the recurrent port congestion over the past few years has been the introduction of ULCVs and the sheer number of containers they can unload in a single call. This has put huge pressure on hinterland supply chains.
Mr. Davidson added: “There are also clear commercial reasons for not going bigger – service frequency has had to be reduced to fill those ships, and there has been an impact on market share, and carriers have needed to enter into alliances to maintain market share and fill those ships. And this could have a deep impact on how shipping alliances are formed in the future”.
Long-term scenario
He concluded, “In the long-term, the most interesting thing is that, if we have reached the ceiling of maximum vessel size, and if container volumes in the market continue to grow, operators that currently need alliance partners to help fill their vessels may well find themselves able to fill them on their own and we may begin to see the break-up of alliances”.
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Source: The Loadstar
