As ultra large container vessels (ULCVs) continue to serve the “economies of scale” objectives of shipping lines, the recent Suez crisis has brought into sharp focus the risks associated with these vessels.
That’s the view of European freight forwarding association Clecat which questions whether these mega-ships have become too big to sail.
While the number of containers they carry has brought economies of scale in the age of globalisation, some industry commentators believe that bigger ships create bigger problems.
Clecat says that the benefits of the economies of scale lie solely with the container carriers, with other parties in the chain bearing the costs. They have raised concerns about the proliferation of the ULCVs putting pressure on the hinterland connections, creating capacity peaks at terminals as well as inland transport restrictions.
And while freight rates were relatively low at times pre-Covid because of the race to build ever-bigger ships, creating overcapacity, this is no longer the case as demand outpaces supply in the new Covid environment.
“With unprecedented peaking freight rates, service quality is at its lowest level ever and there is no sign of improvement,” says the organisation. Global schedule reliability dropped to below 35% in January 2021.
There is no doubt that ultra large container ships are here and are here to stay, but Clecat suggests policymakers, carriers and other stakeholders may want to reconsider this for the next generation of ships.
