Container Analytics: Container shipping’s very BIG future

   To clarify, the future of the ocean liner industry isn’t here per se, at least not yet, but we may have gotten a glimpse of it at the end of 2015. French ocean carrier CMA CGM recently deployed the largest ship ever to call a U.S. port for test stops at the California ports of Los Angeles and Oakland.

   Although by no means the world’s biggest containership currently in use today, the CMA CGM Benjamin Franklin is, for lack of a better word, enormous. At 1,306-feet long, the ship dwarfs the famously “unsinkable” RMS Titanic (882-feet long) and makes the Antonov 225 Mriya (275-feet long), which is generally accepted as the largest aircraft ever built, look like a tinker toy by comparison. Turned upright on its end, the vessel is longer than the Empire State Building is tall.

   In terms of cargo capacity, the Benjamin Franklin can carry as many as 18,000 standard shipping containers, also referred to as twenty-foot equivalent units or TEUs. To put that in perspective, the average vessel size for services in the transpacific trade is currently around 6,700 TEUs, while services with direct connections between Asia, North Europe and the Mediterranean operate with vessels that average more than 11,000 TEUs in capacity, according to data from BlueWater Reporting’s Capacity Report.

   Average vessel size is much larger in the Asia-Europe trade lane despite the transpacific being the largest trade by volume, because U.S. port infrastructure hasn’t kept pace with the demands of these ever-increasingly large containerships. As a result, carriers are able to deploy far fewer loops overall in the Asia-Europe trade—only 37 direct liner services compared to 57 between Asia and North America.

   Although CMA CGM said the test calls at Los Angeles and Oakland were a resounding success, the company was quick to point out it has no immediate plans to deploy such large ships to the U.S. West Coast on any kind of regular basis. That decision “will be reviewed based on the outcome of the trials and the readiness of terminals,” a CMA CGM spokeswoman told American Shipper.

   The Port of Los Angeles reported smooth, seamless operations, while a total of 11,200 containers of all sizes were unloaded from and loaded onto the Benjamin Franklin at APM Terminal’s Pier 400 facility. But many analysts are skeptical that even Los Angeles/Long Beach, the largest port complex in the United States, would be able to handle regular calls from these behemoth vessels.

   To start, the vessel was nowhere near full capacity, meaning that the test call didn’t actually require all of the loading and discharging of containers that would come with a more heavily-laden ship. Further, handling a vessel of that size once poses considerably fewer challenges than doing so on a daily basis as other vessel berths and terminal and drayage operations could be scheduled and planned around this special one-time arrival.

   And, as this column has discussed previously (See American Shipper’s December 2015 issue, “How big are the big ships calling U.S. ports?,” p. 31), the economics of these so-called “mega-vessels”—those with capacities of more than 10,000 TEUs—are highly favorable for carriers, but don’t do much for shippers, who may end up subsidizing some of the cost associated with bringing U.S. ports and intermodal connectivity up to speed to handle them.

   On the U.S. East Coast, for example, ports are experiencing a similar situation in preparing for the completion of the expanded Panama Canal, which will allow ships as large as 13,000 TEUs to transit this important Central American gateway.

   Miami, Norfolk and Baltimore are the only Atlantic U.S. ports that are “big-ship ready,” while others like New York/New Jersey, Savannah, Charleston and Jacksonville still have work to do before mega-vessels are able to call there. All that being said, no carriers have announced plans to regularly send such vessels to any East Coast ports due to challenges that remain with landside infrastructure, drayage and intermodal connectivity, not to mention a fundamental lack of sufficient demand to fill them. The future, and more specifically “a future that resides in ultra-large vessels,” as CMA CGM America President Marc Bourdon put it at a press conference welcoming the Benjamin Franklin to the Port of Los Angeles, is coming. The only real questions then are how soon will it get here, and whether port and inland infrastructure will we be ready for it.

   The Port of Oakland, for one, says it would certainly like to see the gigantic containership return to its terminals in the near future. “So long, ‘Big Ben,’” the port said in a statement following the vessel’s departure, “hurry back.”

   Meyer is web editor of American Shipper and a research analyst with BlueWater Reporting. He can be reached by email at bmeyer@shippers.com.