Skip to main content

Advertisement

Advertisement

commentary Commentary

Commentary: Too big to sail? Suez Canal debacle sparks debate over huge container ships

The grounding of the container ship in the Suez has given pause for thought about the growing mismatch between land and sea infrastructure, say observers.

Commentary: Too big to sail? Suez Canal debacle sparks debate over huge container ships

FILE PHOTO: Stranded container ship Ever Given, one of the world's largest container ships, after it ran aground, March 26. SCA/via REUTERS

LONDON: The blocking of a crucial global trade route, which was built in the mid-19th century, by a modern 220,000-tonne ship as long as the Empire State Building is high has raised questions over the industry’s reliance on such huge vessels.

Salvage experts were on Sunday still working to refloat the Ever Given after it became wedged across the southern entrance to the Suez Canal last week, leaving about 330 vessels stranded on either side and sending tremors through global supply chains. 

Shipowners accelerated their adoption of larger and larger ships to handle the continuing expansion of world trade in the 1990s. The largest container shipping vessels have quadrupled in size during the past 25 years.

“We have seen a continuous rat race in container shipping during the past decades to build larger ships,” said Stefan Verberckmoes, senior shipping analyst at industry consultancy Alphaliner.

READ: Commentary: Why the Suez Canal accident is a worst-case scenario for global trade

READ: Ever Given container ship stuck in Suez Canal 'partially refloated', says canal services firm

ECONOMIES OF SCALE

The biggest ships have the capacity to carry 24,000 20ft containers, enough to stretch 90 miles if they were loaded on a single-decked train. But there is a debate within the industry over whether vessels have outgrown the infrastructure needed to support them.

The chief executives of AP Moller-Maersk and Hapag-Lloyd, two of the world’s largest container groups, have both said that the latest container ships were the right size to handle the demand for global freight.

“This is one unfortunate incident,” said Rolf Habben Jansen, chief executive of Hapag-Lloyd. “I don’t think that should lead us to the conclusion that the ships are too big.”

Ships of this size are both more efficient and environmentally friendly, he said. The sheer scale of modern container vessels means they are estimated to be two and a half times more energy-efficient than rail and seven times more than road, according to the World Shipping Council.

Ships and boats are seen at the entrance of Suez Canal, which was blocked by the stranded container ship Ever Given that ran aground, Egypt, Mar 28, 2021. (Photo: REUTERS/Mohamed Abd El Ghany)

Shipping analysts agree that the Suez Canal, which has been frequently expanded, should be able to accommodate such big vessels.

But the largest container ships have reached the material limits of length: Stacking containers higher makes such ships more susceptible to high winds, while stacking them wider can increase hydrodynamic forces that make them harder to steer in tight spaces, such as ports and canals.

READ: Suez Canal blockage sets shipping rates racing, oil and gas tankers diverted away

BIG SHIPS NEED BIG PORTS

Ships struggled for profitability in the past decade, in large part because they often sailed half-empty, prompting consolidation and alliances to pool resources.

Larger ships are unable to service as many ports as smaller vessels. Shipping goods to big ports for onward shipment raises doubts over the cost-saving proposition of bigger ships. Insurers say they generate a disproportionately bigger cost when things go wrong.

Some believe the problems go deeper. The grounding of the container ship in the Suez has given pause for thought about the growing mismatch between land and sea infrastructure.

READ: Commentary: Tuas Mega Port strongly positions Singapore for a maritime future

At the start of the coronavirus pandemic, companies cut services in the face of falling demand. But as US consumers began to order the goods that they could not buy in shops online instead, the empty containers to transport them were not where they needed to be, namely China.

While inland facilities had to cope with challenges ranging from workers sick with COVID-19 to border restrictions, shipping bottlenecks were exacerbated because it takes ports a long time to unload and reload more than 10,000 containers from the huge ships.

JUMBO JETS OF THE SEA

Marc Levinson, a historian specialising in containers, said shipowners bore significant responsibility for the mess in global supply chains because of their pursuit of ever-larger vessels.

“Their attitude was, ‘We will do what’s best for us and ignore the rest of the logistics industry,’” he said. Larger vessels “worked when the ships were at sea but totally fouled up the land side of the transport system”.

Stranded ship Ever Given, one of the world's largest container ships, is seen after it ran aground, in Suez Canal, Egypt March 28, 2021. Suez Canal Authority/Handout via REUTERS

Large vessels will once again lengthen logjams as the chain of disruptions from the Suez accident plays out.

Soren Skou, Maersk’s chief executive, said huge vessels had been sailing through the Suez Canal for “years and years” and that the 220,000-tonne Ever Given had jammed itself at the narrowest point in the waterway.

“The jumbo jet Boeing 747 was the biggest for many decades. It was the optimal tradeoff between cost per seat and tradability. That’s where we are,” he said.

READ: Commentary: Singapore ports and ships are turning the tide on climate change

Hapag-Lloyd shows little sign of scaling down. In December, it committed to spending US$1 billion on six ultra-large container vessels powered by liquefied natural gas.

Still, the industry does seem to have taken at least some notice. The order book shows evidence of shipowners starting to downsize their workhorses of global trade towards vessels of about 15,000 containers.

Lars Jensen, chief executive of SeaIntelligence Consulting, said “we see a slight retrograde movement”.

Source: Financial Times/el

Advertisement

Also worth reading

Advertisement