Can the carriers fill all these ultra-large containerships? And if so, for how long?
The current holder of the title of the world’s biggest containership, the 19,100 teu CSCL Globe, was full to the gunnels as it completed its North European maiden call this week.
And it was a rare event for the industry as it caught the mainstream media’s attention, thanks to some enterprising PR.
Many of the boxes in the deck stacks were no doubt empty, but for the purposes of the photo shoots a fully-loaded image was a necessity, and made a bullish statement for the Chinese carrier.
Elsewhere last week, the starting gun was fired for the start of the big battle of the east-west alliances as the 18,270 teu Munkebo Maersk departed Dalian, China, on the inaugural sailing of the 2M alliance’s flagship Albatross / AE5 service between Asia and North Europe.
The Munkebo Maersk will be followed by sister ship, Maren Maersk, leaving Dalian on 18 January and the 19,224 teu MSC Oscar on the 25th, when it will officially assume the crown of the world’s largest containership.
Initially the service will deploy 11 ships of between 13,000 and 19,200 teu, but after further arrivals of Maersk Triple-E vessels and more MSC chartered-in 19,200 teu ships, the loop will become a standardised 18,300 – 19,200 teu service, thereby laying claim to be the alliance boasting the biggest ships.
However, ultra-large containerships need to run with sufficient utilisation levels to enjoy the economy of scale advantage over their smaller ship-operating rivals –- after all that is the object of the billions of dollars invested in these behemoths, and not least the new attraction for a vessel sharing marriage between hitherto unlikely bedfellow competitors.
Indeed, the carrier members of the east-west alliances are now resigned to filling their slot allocations with spot rate cargo after years of being in denial over the existence of this market.
And the collapse of oil prices, which has resulted in bunker costs declining from $600 per tonne to below $250 in less than six months, has given the carriers plenty more wriggle-room to discount rates.
Indeed, given the comments from a CSCL executive in Hamburg during the maiden call of the CSCL Globe – that due to the decline in bunker prices the breakeven point for headhaul cargo was now below $600 per teu – the prospects for the next round of carrier general rate increases due to be implemented at the end of this week do not appear good.
Moreover, the G6, the CKYHE and, not least the newly-formed Ocean Three, alliances will certainly be fighting hard to keep, if not increase, market share. Thus the intense competition for cargo in the lead-up to the Chinese new year will only drive rates further south.
The questions that might give carriers some sleepless nights in the next months are what happens: if consumers in North Europe postpone their big tickets spends due to negative inflation; or oil prices head back to the old ‘normal’?
And it was a rare event for the industry as it caught the mainstream media’s attention, thanks to some enterprising PR.
Many of the boxes in the deck stacks were no doubt empty, but for the purposes of the photo shoots a fully-loaded image was a necessity, and made a bullish statement for the Chinese carrier.
Elsewhere last week, the starting gun was fired for the start of the big battle of the east-west alliances as the 18,270 teu Munkebo Maersk departed Dalian, China, on the inaugural sailing of the 2M alliance’s flagship Albatross / AE5 service between Asia and North Europe.
The Munkebo Maersk will be followed by sister ship, Maren Maersk, leaving Dalian on 18 January and the 19,224 teu MSC Oscar on the 25th, when it will officially assume the crown of the world’s largest containership.
Initially the service will deploy 11 ships of between 13,000 and 19,200 teu, but after further arrivals of Maersk Triple-E vessels and more MSC chartered-in 19,200 teu ships, the loop will become a standardised 18,300 – 19,200 teu service, thereby laying claim to be the alliance boasting the biggest ships.
However, ultra-large containerships need to run with sufficient utilisation levels to enjoy the economy of scale advantage over their smaller ship-operating rivals –- after all that is the object of the billions of dollars invested in these behemoths, and not least the new attraction for a vessel sharing marriage between hitherto unlikely bedfellow competitors.
Indeed, the carrier members of the east-west alliances are now resigned to filling their slot allocations with spot rate cargo after years of being in denial over the existence of this market.
And the collapse of oil prices, which has resulted in bunker costs declining from $600 per tonne to below $250 in less than six months, has given the carriers plenty more wriggle-room to discount rates.
Indeed, given the comments from a CSCL executive in Hamburg during the maiden call of the CSCL Globe – that due to the decline in bunker prices the breakeven point for headhaul cargo was now below $600 per teu – the prospects for the next round of carrier general rate increases due to be implemented at the end of this week do not appear good.
Moreover, the G6, the CKYHE and, not least the newly-formed Ocean Three, alliances will certainly be fighting hard to keep, if not increase, market share. Thus the intense competition for cargo in the lead-up to the Chinese new year will only drive rates further south.
The questions that might give carriers some sleepless nights in the next months are what happens: if consumers in North Europe postpone their big tickets spends due to negative inflation; or oil prices head back to the old ‘normal’?
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