Ever since the 11,000 TEU Emma Maersk broke records in 2006, megaships have grown in size, capacity and number, says Sean Barker.
Why are we seeing ever-larger vessels?
The simple answer is ‘economy of scale’. Clearly, bigger vessels reduce the transit cost of each individual shipped container. Where there is demand there will be supply – and where there is profit there will be competition for supply.
Today’s megaships are the latest strategic move by the shipping sector to reduce cost of supply, an evolution that dates back to when Columbus initiated globalisation by shipping goods from the Americas to Europe.
So, ports are forced to adapt?
In effect, yes. Historically, ships have always led the way in terms of technological advances, with port infrastructure playing catch-up to these changes. Increases in ship size traditionally result in more complicated logistics chains and require increased port and hinterland infrastructure capacity, which comes at a cost. Lest we forget, the port is part of an integrated supply chain, which facilitates the bringing of goods from distant places to the doorstep of the consumer.
The shipping lines have done their part in reducing supply chain costs, and they’re now looking to the ports to match their contribution. Indeed, port congestion has been cited as the new barrier to international trade.
What are the implications of this changing landscape for port infrastructure?
With larger vessels arriving more consistently, ports will clearly need to improve their productivity. Factors influencing productivity can be grouped as physical, institutional and organisational, and they all play their part. From 2000 to 2010 there was an upward trend from 47% to 57% of increasing port efficiency within developing regions.
The principal factors were found to be – in no particular order – increased private sector participation, reduced corruption in the public sector, improvements in shipping line connectivity, improved landside multimodal links and improvements to physical infrastructure.
What are the most commonplace improvements?
To accommodate these vessels requires investment across the suite of port infrastructure: dredged channels and pockets, quay structures, yard configurations, gate facilities, handling equipment and power provision. In the port hinterland we need joined-up strategies promoted by regional governmental entities to identify and drive initiatives to facilitate efficient movement of goods to and from our ports.
Globally, port operators are seizing this window of opportunity to create integrated systems that complement the megaship supply chain. As history shows: if ships are laden, then ports must make themselves ready.