OECD and Industry Groups Clash on Effects of Mega-Containerships

Tuesday June 2, 2015

A unit of the Organisation for Economic Co-Operation and Development (OECD) and the World Shipping Council (WSC) have differed in their opinions on larger containerships and their effects on ports and costs, JOC reports

While the International Transport Forum (ITF) in a recent report said it believes that costs are rising as mega-containerships contribute to port congestion and add to the need for costly infrastructure upgrades, the WSC argues that larger vessels reduce the fuel, and therefore cost, of shipping per container. 

"Larger vessels allow ocean carriers to share vessel space and increase the efficient use of the vessels to transport importers' and exporters' cargo, while at the same time reducing fuel consumed and air emissions per TEU," said the WSC. 

However, ITF calculations claim that the cost savings from this generation of size upgrades is four to six times smaller than previous instances of upsizing, with about 60 percent of current savings coming from energy-efficient engines rather than ship size.

Concerns over mega-containerships are also reportedly echoed by experts in other parts of the industry. 

According to Martin Stopford, director of Clarkson Research Services, capacity size of ships is growing at a faster rate than ever before, which has strained the industry's ability to cope. 

"It should happen only one step at a time, because there are only a few ports that can handle them," he said. 

A mega-ship's cost savings could also be as low as 6.6 percent because operating at sea makes up about a third of systems costs, said Jim Brennan, a partner at Norbridge, Inc.

"The potential costs savings to carriers appears to be fairly marginal, but infrastructure upsizing costs could be phenomenal," the ITF said in its report. 

Insurers have also been vocal in recent months about the fear of having to insure a containership with an excessive amount of cargo aboard, with Ship and Bunker experts having predicted that insurers would ultimately be deciding factors in discouraging continued size growth.