Mega-Ships

Mega-Ships

The rise of ‘mega-ships’ (often defined as ships with a capacity greater than 10,000 TEUs) took place in earnest during the recovery from the 2008 financial crisis. In their search for greater fuel efficiency and economies of scale, the world’s container carriers increasingly ordered larger and larger vessels, especially for use on the Asia-Europe trade lane.

Until the development of mega-ships, carriers that sought to service the East Coast of North America with the earlier generation of ‘post-Panamax’ ships needed to transit the Suez Canal because those vessels were too big to sail through the Panama Canal. 

With the gradual introduction of the mega-ships, the average capacity of container ships deployed on the Asia-Europe trade lane has become especially large.

Despite the cost-effectiveness of mega-ships, some major North American ports have faced the challenge of mitigating the bottlenecks at marine terminals that result from container exchanges involving such massive volumes of cargo.

At sea, other sorts of challenges may stem from the fact that there are so many containers on these huge vessels. Several high-profile (even deadly) fires on mega-ships have highlighted the dangers of packing so many containers onto a single vessel, while driving up related insurance costs. In addition, the enormous capacity of such mega-ships often raises the probability that dangerous goods may have been loaded aboard.

Several fires on board container ships have been caused by hazardous or flammable cargo that was misdeclared. One of the most common culprits is calcium hypochlorite, used to treat drinking water and swimming pools. While this chemical may be carried on board ships, there are stringent guidelines regarding how it should be carried. Some less scrupulous shippers have misdeclared it as fertilizer or as other more stable compounds in order to avoid paying a higher freight rate.

Alerted to such risks, ship operators, insurers and regulators are increasingly focusing on the chemicals, batteries and other goods that can trigger or feed a fire.

News & Analysis

14 Aug 2019
Evergreen Marine has plunged deeper into the mega-ship operating space, ordering another 11 ships in addition to the 11 that are already being built and delivered.
24 Jul 2019
It has taken many years, but finally dredging work on the crucial river access to Europe’s third-largest port has begun.
09 May 2019
The economic and trade forecasts for 2019 are mixed, but in volume terms the year is off to a good start, as evidenced by a strong first quarter for Hapag-Lloyd.
06 May 2019
Shippers that import and export goods through the Port of Houston are being urged to contact legislators and express opposition to two bills that would limit mega-ship calls at the port to one a week.
The Port of Los Angeles.
25 Jan 2019
Mega-ships and California environmental regulatory pressure is pushing APM Terminals to automate 100 acres of its Los Angeles facility.
21 Jan 2019
Asia-Europe carriers are expected to deploy a host of strategies to absorb the mega-ship capacity coming online this year.

Commentary

The Port of New York and New Jersey will face multiple-port competition for discretionary cargo in the decade ahead and with the head of the seaport departing, that intensifying competition calls out for a leader with operating experience.