Wednesday, 11 November 2015

Will smaller be the new big for container vessels?

Supersize me?

After container ships were initially made in the 1950s, shipowners and shipbuilders have actually been non-stop creating bigger vessels in a bid for more extensive cost effectiveness.

The container vessels have multiplied in proportion from holding under 500 twenty foot containers, termed 20 foot equivalent units (TEUs) in the marketplace, to carting approximately 20,000 today.

But this arms race has elevated the concern of overcapacity firstly from a slowing increase in the quantity of intercontinental business.

Container shipping costs are generally crumbling and shipping lines are beginning to feel the press. This is highlighted by a income alert from one of the world's most important shipping companies, late last month.

A Danish corporation pointed out current market factors have pushed it to chop 4,000 jobs, cut down capacity and discard plans to develop six new supersized 20,000 TEU vessels.

Is it a little blip in the relentless competition to scale up? Or is it a turning point which will show the creating of ever greater vessels is no longer driving cost savings, but is instead simply just bringing down the transport charges vessels rely upon?

A shipping consultancy, suggest the latter is valid:

"Maersk's downgrade and idling of flagships is a stark reality check for a marketplace teetering on the side of a return to deep losses which has until now only been sidestepped simply because of low fuel charges, and could well be the prompt for action that is needed to stop the rot."

The situation might yet get worse.

An additional shipping company shared with fastFT:

"I feel it's informing - there are a great deal more than 70 container ships north of 18,000 TEU on order, with a little more than 30 in the water, so the there is witout a doubt a long tail to the upsizing development that is yet to be felt."

Nevertheless while it's primarily the newest, bigger ships fuelling the overcapacity, the more compact ships could possibly be the ones to become affected. He pronounces:

"We assume the bigger issue is most likely the tonnage which gets displaced as a result of these bigger ships. Global fleet is turning out to be a little lopsided, and unless we grow our way out of it - that looks much less likely near-term - the pockets of tonnage that will get squeezed out are sure to come with bigger issues, in particular for owners left holding the bag."

Right here is a timetable of the way in which container vessels have progressed:

1956 - the Ideal X, a altered World War II oil tanker, manufactures original commercial container-laden, transporting 58 storage containers from Port Newark, New Jersey, to Port of Houston, Texas.

1960 - Sant Eliana has become first container vessel to participate in global commerce, traveling from New York to Venezuela.

1966 - SS Fairland rolls out very first transatlantic container service, embarking from New York to Grangemouth and also Rotterdam with 400 TEU on-ship.

1967 - The first purpose-built offshore shipping container carrier, the 700 TEU Atlantic Span, is finalized.

1969 - Shipping writer Richard Gibney coins the saying TEU or twenty foot equivalent unit.

1971 - First entirely containerised operation between European countries and Asian countries launched

1972 - 2,228TEU Kurama Maru happens to be very first container vessel of Panamax measurements

1988 - First "post-Panamax" container ship - a vessel too sizeable to fit through the Panama canal- is developed by Howaldtswerke-Deutsche Werft from Hamburg to hold 4,300 TEU.

1995 - Mitsubishi Heavy Industries send bigger than 5,000 TEU

2003 - Primary container ship greater than 8,000 TEU manufactured

2006 - 50 year anniversary of containerisation

2014 - Fresh development of seriously big shipping container vessels are complete, with volume of 19,000+ TEU

2018 - No end in view. Industry watchers hope 22,000+ TEU boats to be in service

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