Triple-Es slipping into AE10 string
Maersk Line’s mega ships are limiting loading to avoid swamping the Asia-North Europe service with excess capacity.
In an online discussion recently, a maritime consultant described the container shipping industry as “a machine with small and large cogs synchronized at different speeds”.
He was commenting on the trend of introducing ultra large container carriers (ULCCs) on the Asia-North Europe trade, led by Maersk Line and its new Triple-E class vessels that can carry 18,000 TEUs.
It was an apt description of a trade that is reconfiguring itself to cope with increased container volumes being loaded and off loaded at ports in Maersk’s AE10 string.
The large cog of port calls must be synchronized with the smaller cog of feeder operations that bring in containers via river trade, coastal shipping or barge to the hub ports for collection.
Maersk will not have the final word on ship size, either. China Shipping will weigh in with five 18,400 TEU vessels from late next year and there is already talk about developing 22,000 TEU capacity ships. It is not clear who actually has the testicular fortitude to put in that order.
Port selection is a key point in the discussion of such large capacity vessels because their size is such an enormous limiting factor. As it is, nothing over 5,000 TEU can get through the Panama Canal, and even when its expansion is completed in 2015 the largest ship able to pass through on the all-water route from Asia to the US East Coast will not be much larger than 10,000 TEU.
That forces the ULCCs to remain on Asia-North Europe routes. But consider this, Maersk’s 20 Triple-Es will inject 360,000 TEUs of capacity by the end of next year. All the capacity being replaced has to go somewhere, and the only option (beside a bit of scrapping and lay ups) is to cascade down to the smaller trades. Because the ships are unsuitably large for the north-south markets, the result is plunging freight rates.
There is nothing remarkable about the port rotation of the AE10 service, which is the standard for that string. Gdansk - Aarhus - Gothenburg - Bremerhaven - Rotterdam - Port Tangier - Singapore - Yantian - Hong Kong - Kwangyang - Ningbo - Shanghai - Tanjung Pelepas.
Two Triple-Es have joined the smaller 14,200 TEU E-class vessels on the service, Maersk McKinney-Moller and Majestic Maersk, with Mary Maersk scheduled to join next month. Until the full string is complete with nine or 10 Triple-Es, Maersk will only load the 18,000 TEU ships with 14,200 boxes to avoid flooding the route with capacity and dragging down rates.
Gdansk has long been a Maersk port with the strong economy of Poland to back it up, and the South China stops at Hong Kong and Yantian show that even with the declining throughput of the ports, the volume still warrants a double call. Yantian catches cargo from the eastern Pearl River Delta while boxes from the western PRD are barged or trucked down to Hong Kong.
Stopping at a Mediterranean port like Tangier brings Africa transhipment into the picture.
But back to those synchronized cogs. Apart from the actual ability of a port to handle the mega ships, an extensive cargo catchment area is critical to the port calls. That includes the ability of service providers to feed in enough containerized cargo or have a large enough transshipment market to warrant a stop by a string of the biggest ships in the world.