I am not writing about Trump and his manhood fight with Cruz, but about the race to operate ever-bigger container ships by carriers, that as published today by Financial Times, could be sailing towards the finishing flag as pursuing yet another big increase in size would not be cost-efficient.
Up to now, carriers have found that the larger the ship is, the cheaper it is to carry each container. The capacity of the biggest container ships afloat has risen sharply in the last five years and more than doubled since 2000. But the next step-up in size would impose such significant costs on ports that they would outweigh the advantages of moving cargo in ever-larger vessels.
This comes after carriers have poured billions of dollars since the financial crisis into new, bigger ships, which has contributed to the industry’s financial woes. Carriers have not only had to find hundreds of millions of dollars per vessel to buy the ships but have suffered sharp earning declines as the new ships have created excess capacity, driving down fees per container shipped.
Maersk Line operates the world’s biggest container ship fleet, warned in February that the combination of factors was producing market conditions “significantly worse” than during the 2008-09 financial crisis.
The highest-capacity ships currently afloat — Mediterranean Shipping Company’s Oscar class, introduced last year — are 395m long, 59m wide and can carry 19,224 TEUs.
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