Are mega-ports out?
Ultra-large container vessels (ULCVs) are continuing to make waves on land too. Analysts believe that they force ports and terminals to make investments that cannot pay off. The equation is not that simple, however, according to some experts.
Those market analysts who did not trust the mega-ships right from the start are now seeing their apprehensions for the maritime industry confirmed by the newest reports. At the latest industry meeting, namely TOC Europe, which took place in Amsterdam at the end of June, Lars Jensen, of Sea Intelligence Consulting, illustrated that the crisis for shipping lines may just have been the beginning.
Investments and miscalculations
The thesis propagated by Jensen is as simple as it is logical. The growing number of ultra-large container vessels (ULCVs) with capacities to carry between 18,000 and 21,000 teu is soon set to constitute the core of the global shipping fleet. By the year 2025 it will be managed by a mere six to eight shipping lines or alliances. Terminals, which have no choice but to enter the race for size and rapid turnaround times, may face a few nasty surprises.
“I’m afraid that some terminals will suffer catastrophic economic failure over the coming few years,” Jensen said, as “global carriers will only call at certain select hubs in the future.” Such developments would make every other port one of the game’s losers, as they would have worked on the expansion of their infrastructure to be able to welcome mega-ships for nothing.
Gazing into the crystal ball
Jensen’s hypothesis is not all that new. It was first propounded when mega-ships initially started to appear in the market, and was widely discussed in the ITF and the OECD, amongst many other institutions, two years ago. Numerous ports are run at a very tidy profit today, as Drewry’s Neil Davidson also reminded his audience at TOC Europe. An extrapolation of developments to 2025 is risky, of course, what with the Hanjin bankruptcy just one year old. And what will we do if volumes suddenly start growing strongly again on account of a boom?