Journal of Commerce
24 April 2008

SAN FRANCISCO — Shipping lines are already deploying 10,000- to 14,000-TEU vessels, but terminal operators are not ready for the mega-vessels, according to a European industry analyst.

"Marine terminal performance today is not in line with what shipping lines expect," said Gustaaf De Monie, senior director of Policy Research Corp. in Antwerp, Belgium.

Carriers and their customers incur large losses when ships are delayed in port because terminal operators take too long to work the vessels. For operators of the largest vessels afloat, such as the Emma Maersk, with a capacity of 14,300 TEUs, the losses are staggering.

The value of the cargo on a fully laden 14,000-TEU ship totals about $1 billion, De Monie told the Navis World conference in San Francisco this week. In addition to shipper-incurred expenses associated with inventory-carrying costs, carrier costs for the mega-ships include amortization of the vessel, as well as operational expenses and the cost of the equipment.

Taking too long to work these vessels in port costs the carrier and its customers $227,481 a day, De Monie said.

In order to achieve maximum efficiency from modern cargo-handling equipment, a terminal operator must handle 5,000 containers in a 24-hour period. If the operator can sustain a productivity of 40 container moves per hour, per crane, the terminal must assign seven or eight cranes per vessel.

If the terminal operator can only maintain a productivity level of 30 container moves per hour, per crane, which is more common at U.S. ports, the operator would have to work 10 cranes against the vessel in order to achieve the desired productivity.

The task of terminal operators will grow increasingly complex due to government regulations and environmental constraints that hold up marine terminal expansion projects. Delays of seven to 10 years in constructing marine terminal and infrastructure projects are having a significant impact on the industry's ability to develop new, more-efficient terminals and connecting infrastructure.

De Monie sees the number of mega-ships in the global fleet increasing steadily as carriers seek reductions in per-unit costs. Eventually, he predicts, there will be only five or six mega-ports worldwide handling 14,000-TEU vessels. The mega-ships will be deployed in the major east-west trade lanes, with smaller regional ports handling smaller vessels on feeder routes.