'Ships get bigger and bigger' in drive for economies of scale


Economic pressures are driving the move towards ever larger container ships, according to a senior Maersk Line executive.

"Ships will get bigger and bigger until physically it's no longer possible to handle them," said Maersk New Zealand managing director Julian Bevis in an interview.

He said ship operators needed economies of scale against the backdrop of economic volatility.

Maersk Line announced last year that it had ordered ten 18,000 twenty-foot equivalent unit (TEU) capacity container ships for delivery between 2013 and 2015.

It said they would be the world's largest and most efficient vessels.

Bevis's latest remarks were made to a reporter from a New Zealand-based news provider (The Nelson Mail).

The interview followed Maersk's decision to add Port Nelson to port rotation that includes Tanjung Pelepas in Malaysia, Singapore, and the New Zealand ports ofTauranga, Wellington, and Port Chalmers.

Bevis warned that freight rates would have to rise. "Commercially we're in a situation now where we are trying to put some of the rates back up again because we can't carry on doing what we've been doing, losing that amount of money.

"How much and when and where and how I'm not sure yet, but I don't think there's very much doubt that we're going to have to do something about it."

He went on: "It depends how you do the sums, but rates are 25-30 % below where they were five to six years ago, with costs going the other way."

Maersk Line operated at a $599 million loss in the first three months of 2012, blaming in part rising bunker prices.

Earlier this month Maersk said it was pulling out of the New Zealand port of Timarubecause cargo volumes had fallen.

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