Mega box ships are unlikely to get bigger anytime soon, according to Drewry Shipping Consultants.
At its quarterly ports sector briefing, Drewry ports and terminals practice senior analyst Neil Davidson said “All of the ships currently on the orderbook do not exceed the present length/beam/draft maxima and there are no signs that any carriers are looking to go beyond this. In fact, previous modelling by Drewry has shown that even the current largest ships may be too large, depending on your point of view. While they generate operating cost savings for lines, they increase costs in ports and terminals, and result in a higher overall system cost.”
He added that furthermore, there is the question of the feasibility of filling even larger ships. “At present, lines have to be in marriages of convenience (alliances) to fill their ships. To fill even larger ships would need more M&A and/or larger alliances (and likely regulatory issues), or a reduction in service frequency (not attractive to shippers). To say nothing of the impact on ports and terminals which are already challenged by ship size.”
Commenting on the impact of maximum ship size on the future of the liner alliances, Mr Davidson said “In theory, if the current maximum ship size turns out to be the maximum forever, then over the long term, as overall container trade volumes grow, eventually you could reach the point where individual carriers have enough cargo to fill their very large ships on their own (without the need for alliances).”
But he said there are factors working against this such as potential new entrants to the market, and a desire to increase service frequency and port coverage.
In the meantime, alliances are not fixed forever. “We currently have a period of stability, but Hyundai is building big new ships and looking to join an alliance, plus further M&A in the liner sector may disrupt things. In the background too are the regulatory authorities looking again at liner block exemption,” he summed up.