This commentary was written by Lori Ann LaRocco. The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
The word “historic” in the maritime and logistics industry has become so overused that its meaning now is watered down (yes, pun intended). Every week, there seems to be more “historic” news to report. Take your pick: congestion at the ports, container prices, containers falling into the ocean, the denial of trade over empty containers and even vessel size. Headline writing has become a fill-in-the-blank achievement.
The latest series of “historic” headlines are stories reporting on the maiden voyage of the Ever Ace. It is the latest, largest vessel to debut this year, with its wider waistline enabling this A-class vessel to hold up to 23,992 cargo units. By comparison, its sister vessel, the Ever Given, is a G-class ship that can carry 20,124 units.
The Ever Ace has slightly more capacity than HMM’s Hamburg, which debuted last year with a capacity of 23,964. But its claim as world’s largest container ship will have more challengers, with owner Evergreen Marine having several other ultralarge boxships in its order books, each one around 24,000 TEUs.
The reason for these buxom beauties is the vain attempt to speed up the flow of trade by adding capacity. But bigger may not always be better.
The additional haul of TEUs may sound great, but the ports lack the capacity to efficiently move the trade off the vessel to process it into warehouses and onto rails and roads. If the girdles are loosening, the ports receiving these vessels need to have an elastic waistband to handle the increase in container volumes. This is where the argument for digital capacity comes into play — but that is for another column coming soon.
This week, the Ever Ace is at the U.K.Port of Felixstowe in Suffolk. Its “historic” journey began on July 29 when the Ever Ace was delivered to Evergreen by Samsung Heavy Industries. It departed the Qingdao Port of Shanghai with 6,200 TEUs and reached the Port of Taipei on Aug. 8, then traveled to Yantian, China. The Ever Ace eventually made its way to Europe and arrived at Suffolk early Sunday morning. On Wednesday, it will travel to Rotterdam before passing through the Suez Canal.
“With spot rates soaring amid record global demand, Evergreen’s timing couldn’t be better,” said Lynn Huges, analyst with Import Genius.
While the Ever Ace’s arrival at the various ports has garnered headlines and some festivities, you cannot forget the Suez blockage by its slightly smaller sister vessel. The six days of blockage by the Ever Given created a devastating delay in the global delivery of goods for months.
Also not to be forgotten — the dramatic high rate of containers falling off large vessels. The number of lost containers is in the thousands. In 2020, we saw the biggest spike in lost containers in seven years, and in 2021, the toppling of cargo continues. Why? Large vessels are piled to the sky at near-capacity in an effort to “speed up” delivery because of the insatiable demand.
If that pressure wasn’t enough, add a sprinkle of unpredictable weather and the sail effect from those container towers and you have the threat of accidents and container mishaps.
The Ever Ace is part of Evergreen Marine’s new fleet of ultralarge container carriers (ULCCs). Four more are expected to be delivered this year. A total of 12 ULCC ships were ordered to expand the company’s fleet capacity.
Even with the Ever Ace’s enhanced asset capacity, that doesn’t mean it is the solution to the growing problem of demand versus supply.
According to Bimco and Alphaliner, capacity over the past year on the global trade routes has exploded. The Far East-to-Europe trade has risen 19.7%, to 5.25 million TEUs. Capacity on the Far East-to-North America trade has increased an eye-popping 30.6%.
“Adding capacity on already congested trade lanes does little to solve the fundamental problems,” explained Peter Sand, chief shipping analyst at Bimco. “The limiting factor is not capacity on board ships, but rather how many containers the ports and hinterland connections can manage, as well as storage space in temporary container yards and final destinations.”
Remember, the flow of trade is a series of pipes. Adding more volume to this clogged system is only going to further back up the problem.