Prospects for a 26,000 TEU Container Ship

The 18,340 TEU Majestic Maersk

By MarEx
By Harry Valentine 2016-07-03 20:12:54

Recent discussions in the maritime sector suggest the possibility of constructing container ships of 26,000 TEU. 

While the economics of ship transportation improves by increasing carrying capacity relative to operating costs, ship size eventually reaches the size of diminishing returns and especially when sailing between two main ports.

Such supersize ships would be too big to sail through the new, expanded Suez Canal and would be relegated to sailing a few routes such as the trans-Pacific routes between Asian and West Coast American ports, as well as sailing via Cape Town.

Trans-Pacific Service

Industry discussions have focused on alliances between ship companies that could realize the economic benefit from sailing supersize ships. To be viable, supersize ships may need to sail between major transshipment ports and interline with smaller vessels at both ports. 

A trans-Pacific supersize ship may theoretically sail between a Japanese transshipment port and a west coast American transshipment port. At the Asian end of the voyage, interlining ships will carry containers from Shanghai, Busan, Hong Kong and Taiwan. At the American end of the voyage, interlining vessels will carry containers to several other west coast ports. 

A supersize container ship could theoretically sail from an Asian transshipment port to a future transshipment port located in the Gulf of Panama. Upon arrival, it would interline with smaller vessels that sailed across the Panama Canal as well as from South American Pacific ports. After exchanging containers, the supersize vessel would return to Asia while the smaller ships sail to their respective destinations in South America and across the Panama Canal to North American Gulf Coast, Central American and Caribbean destinations. 

However, the frequency of service may be insufficient to warrant construction of a Nicaragua Canal.

African Ports

For westbound sailing involving a supersize container ship, smaller ships may sail from Japanese ports, Busan, Shanghai, Taiwan and Hong Kong to a transshipment ports at Singapore, Malaysia or even Colombo from where the supersize ship will sail toward Cape Town. The number of containers destined for South American Atlantic ports as well as West African ports as far north as Monrovia, Liberia, may be sufficient to warrant the operation of a ship of some 26,000 TEU to a transshipment terminal located near Cape Town where it will interline with ships serving West and East African ports as well as South America.

A massive exchange of containers would occur at or near Cape Town, not only between supersize ship and smaller ships, but also amongst the smaller ships that sail from and return to West African and East African ports. The volume of containers destined for South America will determine as to whether the giant ship would sail westbound across the South Atlantic or return to major Asian transshipment terminals carrying containers from West Africa, South America and the southern region of South Africa. Sailing the giant ship to South America invites evaluation of a future trans-Atlantic container market.

Atlantic Container Market

At the present time, Brazil’s economy is in a downturn. Future economic recovery and growth could produce an increase in trade between Brazil and Asian nations, between east coast South America and east coast North America as well as between east coast South America and Europe. A future transshipment terminal near Santos would offer connections to Buenos Aires, Montevideo and several Brazilian Atlantic ports. 

Competitive transportation costs aboard the supersize ship could extend its future sailing range or those of the interline ships to include the southern and southeastern Caribbean region. 

Fortaleza Option

A possible future transshipment port at Fortaleza, Brazil, could open a possible market for supersize container ships to sail to a European transshipment port carrying containers from South American Atlantic ports extending as far south as Buenos Aires as well as southern and south-eastern Africa. At Fortaleza, it could interline with ships from major equatorial West African ports that would be sailing to American ports. 

On future southbound voyages, the giant ship would leave a European port carrying containers destined for the combination of South America as well as southern and south-eastern Africa. 

On the southbound voyage, it could interline at Fortaleza with ships sailing from North American to equatorial West African ports as well as with ships sailing to South American ports. It may take on containers destined for southern and south-eastern African ports before sailing to Santos to load containers destined for Southern and East African ports as well as Asian ports. It could meet the westbound companion ship at a Cape Town area transshipment terminal to exchange some containers and take aboard containers moving from West African to Asian ports.

Conclusion

While ships of 26,000 TEU may be too large to sail through the Suez Canal, such ships may still sail the trans-Pacific service and also sail via Cape Town. A combination of factors could create a market application for supersize container ships on the Atlantic Ocean, connecting transshipment terminals to possible future transshipment terminals at or near Cape Town as well as Brazil. 

A series of alliances and agreements amongst shipping operators could create market application for such large ships on the Indian, Pacific and Atlantic Oceans. Further independent market research will be required to determine the ship’s future applicability.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.