It looks like rough weather ahead for containership operators as slots are added with tepid demand. At the recent Trans Pacific Maritime Conference (TPM) in Long Beach, delegates wrestled with the volatile mix of big ships and small returns. BY STAS MARGARONIS, AJOT The announcement that Maersk is ordering a fleet of 18,000 teu (twenty foot unit) container ships at a time of growing overcapacity and declining ocean freight rates is raising concerns that there will soon be fewer ocean carriers, fewer US ports serving those carriers, and fewer 6,000 teu container ships. In 2011, Maersk announced that it plans to order twenty ‘Triple E’ class 18,000 teu container ships, but not exercise an option for ten more, because: “Maersk Line expects demand on the Asia to Europe trade to increase 5-8% per year during 2011-2015. By introducing the Triple-E vessels from 2013, Maersk Line will be able to meet the increasing demand as well as maintain its market share. The first 10 vessels will be delivered 2013 and 2014; the second 10 vessels are scheduled for delivery in 2014 and 2015. Triple E Class Called the ‘Triple-E’ class for the three main purposes behind their creation — economy of scale, energy efficiency and environmentally improved — the ships set a new industry benchmark for size and fuel efficiency. Four hundred metres long, 59 metres wide and 73 metres high, the Triple-E is the largest vessel of any type on the water today. Its 18,000 TEU (twenty-foot container) capacity is 16% greater (2,500 containers) than today’s largest container vessel, Emma Maersk. The Triple-E will produce 20% less CO2 per container moved compared to Emma Maersk and 50% less CO2 than the industry average on the Asia-Europe trade lane. In addition, it will consume approximately 35% less fuel per container than the 13,100 TEU vessels being delivered to other container shipping lines in the next few years, also for Asia-Europe service. Speakers at the Trans Pacific Maritime (TPM) conference held at Long Beach, California in March warned about the threat to existing ocean carriers as freight rates remain uneconomically low, and new mega ship orders contribute to an overcapacity problem that one analyst likened to “playing a game of chicken.” There were several trends emerging from the conference: • There is a shakeout brewing that could see the current twenty global carriers reduced to eight carriers, according to Lars Jensen, CEO, SeaIntel Maritime Analysis, based in Copenhagen, Denmark. Unsaid is the concern that two carriers will eventually dominate, and those are China Ocean Shipping Company (COSCO) and Maersk Line. Coincidentally, it was the speakers for COSCO and Maersk who dominated the opening day of the TPM conference. • The oversupply of vessels means smaller vessels will need to be scrapped. Shipping analysts said the delivery of more mega ships - 10,000 teus and over - makes vessels of 6,000 teus and less obsolete from a fuel and cost efficiency standpoint. The conclusion is these ships will need to be scrapped. • The result of these trends and rising fuel costs is that carriers will reduce the number of US ports served by the ocean carriers. One shipping executive says this trend has been clear for some time. The San Pedro Bay ports of Los Angeles and Long Beach are expected to benefit from being the only West Coast complex capable of handling bigger vessels coming from Asia and having the rail connection to speed freight to Eastern destinations. The big question is which East Coast port will handle the bigger ships in the event of a major consolidation: New York/New Jersey, Norfolk or Savannah. This will leave a number of ports scrambling for business. Perhaps the business that they may be forced to embrace is marine highway shipping. This is where US built ships move containers from major ports to smaller ports, an initiative that has been promoted by the US Maritime Administration and by carriers such as American Feeder Lines. • The final unknown is whether the decline in consumpti