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Big Ships that are Coming or Already Here Present New Challenges

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Big Ships that are Coming or Already Here Present New Challenges

The year 2020 is almost here and customer demands, import and export trends and trade tensions show no signs of slowing down. The new year presents both opportunities and challenges for players within the supply chain to increase productivity through maximizing resources or get left behind as competitors take over. There are layers of factors for global shippers to consider in determining the best approach in remaining both competitive, efficient, and to be honest, relevant. Major factors in consideration include IMO 2020, traffic increases and vessel sizing.

Looking at some statistics reveals an interesting picture of exactly what’s going on and what shippers can prepare for based on last year’s trends. According to the 2019 North American Ports Outlook report by Cushman & Wakefield, the intermodal traffic rates saw an increase by 5.5 percent, while 90 percent of internationally shipped dry, non-bulk manufactured goods are containerized. Oh yeah, automobile imports are on the rise also.

Data make clear that big ships can not only create competitive advantages but also recreate what modern competition looks like. Cushman & Wakefield’s report shows that 79 percent of the international containership supply is dominated by the 2M Alliance (Maersk and MSC), the Ocean Alliance (CMA CGM, COSCO and Evergreen) and THE Alliance (ONE, Hapag Lloyd and Yang Ming). Not only do these alliances carry a massive amount of clout among competitors globally, but they also boast massive container vessels.

COSCO Shipping Universe, for example, sits right at 21,237 TEU capacity at 400 meters x 58.6 meters. This massive vessel holds the title as the largest cargo ship in China and the fourth largest in the world. Additionally, this vessel comes with an added bonus to further charge its performance through the support of ABB Turbocharges that enable the vessel to travel at 22 nautical miles per hour.

“The ABB turbochargers on COSCO Shipping Universe will support maximum performance and fuel efficiency, in addition to contributing to COSCO Shipping Lines pursuing green shipping practices for long-term success,” stated Oliver Riemenschneider, managing director, ABB Turbocharging in a press release announcing the vessel’s delivery in June of 2018. “We foresee the ABB turbochargers on the forthcoming mega container ships in the Universe series will contribute similar viable operational gains.”

As the vessels get bigger and better, industry players can rightfully anticipate this as a major trend to keep an eye out for in 2020. Although increasing ship sizes supporting more capacity with fewer miles in between is a win-win, shippers must consider how this impacts the ports and their size capabilities and most importantly, their access to such ports. The North American Ports Outlook report states that orders for new vessels are being placed exceeding 22,000 TEUs and that East Coast ports are beginning to see more large ships. Furthermore, the Neopanamax Locks confirmed that as of just recently, it can handle over 14,000 TEU ships, but not by much. That’s not going to cut it for the big ships predicted in the near future.

MSC Mediterranean Shipping Co. announced a successful Asia-to-Europe voyage for the MSC Gülsün ship. The 23,756 TEU vessel holds the title as the world’s largest container ship and adds a new level of quality with its advanced engineering focused on energy efficiency and reduced fuel consumption overall. The Gülsün is one of more than 10 ships to be added to MSC’s advanced fleet between 2019-2020, and it doesn’t stop there. The IMO-2020 ready vessel boasts a hybrid Exhaust Gas Cleaning System (UN IMO-approved, of course) paired with a low-Sulphur fuel and/or LNG adaptation option. Not only is this ship more than prepared for revolutionizing the approach to IMO standards, but it’s also making a big dent in operational efficiencies.

Evergreen also made news last year by confirming new vessels with up to 23,000 TEU capacity are being added to its fleet. Information released from numerous sources confirmed that five or more vessels with such TEU capacity were approved for order. These mega-ships will be built at South Korea’s Samsung Heavy Industries shipyard and China State Shipbuilding Corp.with a price tag of roughly $1.6 billion. The order was placed back in September and current service estimation sits between 12-18 months, according to various reports.

Go ahead and add Germany’s Hapag-Lloyd to the list of super vessels to come. The Wall Street Journal reported that up to six ships with TEU capacity well over 20,000 were confirmed. Hapag Lloyd already boasts six vessels within the A 18 class with more than 19,000 TEU capacity. Overall, Hapag Lloyd boasts a total fleet TEU capacity of 1.7 million… and counting.

Even with these new massive ships on the horizon, it is hard to compare to the OOCL Hong Kong, the first of six in the G-class with a whopping 21,413 TEU capacity. One such ship went down in history as the world’s first to ever break the 21,000 TEU-capacity marks. Within months of this announcement, the OOCL Scandinavia, the OOCL Germany and the OOCL United Kingdom–all with 21,4313 TEU capacity—were also announced and christened.

“While our industry seems to have the knack to ‘outdo’ one another in building larger containerships relatively quickly these days, this project is nonetheless an important moment for us,” stated OOCL Chairman C.C. Tung in the announcement. “Faced with increasing competition and un-ending pressure on costs, we need to take the bold step in operating larger size ships of quality and high efficiency in order to stay relevant and compete effectively as a major container shipping company.”

Tung concluded, after the OOCL Scandinavia reveal, “This achievement is about working to bring people and companies of different professions and nationalities together to reach new heights, innovate, solve complicated engineering problems, and along the way, why not break a world record, too.”

Although the OOCL Hong Kong has yet to be replaced, competitors are pushing the limits of capacity to break new records the shipping sector has yet to encounter. Maximizing the capacity limits the industry is currently used to paired with the IMO 2020 regulations and changes will undoubtedly filter the industry leaders. The real question remains: Who will set the bar even higher than what it is now and how will they do it?

HKSPA

World’s Largest Container Vessels Arrive at HKSPA Terminal

Hong Kong Seaport Alliance announced the successful arrival of the OOCL Hong Kong and ten additional OOCL and Cosco Shipping Lines Ltd. mega vessels at the HKSPA Terminal 8 facility this week, just six months following the alliance’s formation. OOCL Hong Kong- known as one of the largest container vessels in the world, deployed along with the other mega vessels at the end of June for the OCEAN Alliance’s Asia-North Europe Service, which included Hong Kong as a port of call.

Hong Kong, despite being small in size, has been in the league of the world’s top ten ports for the past 30 years or so. This is an enviable achievement not easy to accomplish. Credits must go to our port operators for the provision of highly efficient and professional services to the international shipping community,” said Angela Lee, Commissioner for Maritime and Port Development and Deputy Secretary for Transport and Housing (Transport).

“Coupled with our sound fundamentals built over the years, including our free port status, strong international connectivity, trusted common law system, and a level playing field for business, I am confident that our port would be able to further leverage on new opportunities presented by the Greater Bay Area Development, the Belt and Road Initiative and the New Land-Sea Corridor, and continue to thrive as a regional transshipment hub,” Lee added.

The massive OOCL Hong Kong container vessel boasts 21,413 TEU capacity and holds the title as the first in the world to exceed the 21,000 TEU capacity threshold. There are currently only 12 container vessels that can boast capacity of this size, and eight of them are among the mega vessels deployed during the OCEAN Alliance’s Asia-North Europe Service, including Cosco Shipping’s GALAXY. 

“As a Hong Kong company deeply rooted in the city, OOCL HONG KONG’s maiden call has a very special place in many of our hearts, said Andy Tung, Co-Chief Executive Officer of OOCL. “Containerships like the OOCL HONG KONG are important ambassadors of world trade and as a home carrier, we are very proud to have this vessel carry the name of Hong Kong, flying the flag of Hong Kong, and continue serving the industries of Hong Kong. OOCL is very blessed to call Hong Kong our home and being an integral part of the city’s vibrant business community over the last 50 years, providing a vital link to global trade. We like to thank the HKSPA for the wonderful hospitality and celebrating this milestone event together with us.” 

“We are proud of being ranked as the World’s Best Transshipment Port by COSCO SHIPPING this year,” said Hanliang Zhu, Managing Director of the Asia Container Terminals Limited (ACT) during the welcoming reception. “We will keep on working closely with the carriers as well as the shippers and other logistics providers to maintain Hong Kong as a reliable transshipment hub in the region.”