The beginning of July marked another landmark moment in the evolution of the container system – the delivery of the MSC Gulsun, the first box ship to be built to accommodate 24 rows of containers on deck and featuring a capacity of around 23,000 teu, writes Mike Mundy.
Yet another step up in containership dimensions and a further way point along the extraordinary escalation in container ship size that has taken place over recent years.
The MSC Gulsun is the first of 11 vessels of her class to be delivered to MSC and, as might be expected, is now in service in Asia-Europe trade.
It might be true to say, however, that the arrival of the Gulsun and other vessels like her over coming months is at least to some extent a manifestation of the previous over-confidence of liner operators – a view supported by various industry analysts.
The question has also been raised do Ultra Large Container Vessels (ULCVs) really deliver the level of benefit hoped for? Clearly there are doubts and these also seem to be reflected in moves afoot by carriers and others to look elsewhere to secure acceptable margins – along the supply chain for example.
The MSC Gulsun is the first of 11 vessels of her class to be delivered to MSC and, as might be expected, is now in service in Asia-Europe trade.
It might be true to say, however, that the arrival of the Gulsun and other vessels like her over coming months is at least to some extent a manifestation of the previous over-confidence of liner operators – a view supported by various industry analysts.
The question has also been raised do Ultra Large Container Vessels (ULCVs) really deliver the level of benefit hoped for? Clearly there are doubts and these also seem to be reflected in moves afoot by carriers and others to look elsewhere to secure acceptable margins – along the supply chain for example.
Additionally there is growing recognition that global container trade is slowing underpinned by a tightening economic climate. Significantly, this view was voiced recently by Soren Skou, chief executive of A.P. Moller-Maersk, the world’s number one liner operator, in TEU capacity terms. “We clearly see a global economic growth that is declining. We see weaknesses, in particular, in China and Europe. We expect container demand growth to fall to 1% to 3% this year (2019) from 3.8% last year (2018),” he stated in a presentation to investors.
For liner operators there are also what can be termed other ‘internal challenges,’ not the least of these being compliance with the new IMO 2020 ruling that will cut sulphur emissions from ships’ stacks. This is forecast to raise fuel costs by up to one third – how will it be paid for?
It is easy to see how the business climate overall is acting as a catalyst for a re-think – a shift away from pursuing vessel-based scale economies. It is reasonable to expect that an integral part of this will be a general ‘tightening of the belt,’ as again evidenced again by Maersk which notes a new more disciplined approach to capital expenditure.
And it is further reasonable to expect that this ‘belt tightening’ will be appropriate in other sectors of the container industry, not least the port and terminal sector. Expect, for example, increased emphasis on risk management right through from annual contract renewals to new project assessment.
For liner operators there are also what can be termed other ‘internal challenges,’ not the least of these being compliance with the new IMO 2020 ruling that will cut sulphur emissions from ships’ stacks. This is forecast to raise fuel costs by up to one third – how will it be paid for?
It is easy to see how the business climate overall is acting as a catalyst for a re-think – a shift away from pursuing vessel-based scale economies. It is reasonable to expect that an integral part of this will be a general ‘tightening of the belt,’ as again evidenced again by Maersk which notes a new more disciplined approach to capital expenditure.
And it is further reasonable to expect that this ‘belt tightening’ will be appropriate in other sectors of the container industry, not least the port and terminal sector. Expect, for example, increased emphasis on risk management right through from annual contract renewals to new project assessment.
There seems to be a growing case for this type of ‘readjustment’ which can also be interpreted as the greater adoption of a focus taken much more seriously following the financial crisis of 2008-09.
The positive side of this story is, however, that the container sector today is empowered by knowledge, experience and a proven ability to innovate to efficiently navigate the challenges thrown at it.
It is in this respect as a leading industry media that Port Strategy can continue to take a prominent position, disseminating the cutting-edge intelligence that facilitates progress.
The challenges may be different but the objective remains the same - to deliver real, industry focused intelligence that promotes business efficiency.
The positive side of this story is, however, that the container sector today is empowered by knowledge, experience and a proven ability to innovate to efficiently navigate the challenges thrown at it.
It is in this respect as a leading industry media that Port Strategy can continue to take a prominent position, disseminating the cutting-edge intelligence that facilitates progress.
The challenges may be different but the objective remains the same - to deliver real, industry focused intelligence that promotes business efficiency.
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