Tuesday, January 27, 2009

The Mega Containers Invade

From the Wall Street Journal:

As Freight Rates Plunge, Gargantuan Carriers Hope to Muscle Aside Smaller Rivals

Container shippers are unleashing a wave of titanic vessels on the oceans during the biggest dip in global trade since World War II.

The trend could keep sea freight rates depressed well into 2010. That's good news for their customers, the millions of businesses big and small that import parts and products from overseas. But it's likely to spell pain within the shipping industry itself and could precipitate consolidation as smaller players are pushed out.

[Giant Container Ship]

Jumbo vessels, like the one above, can result in great economies of scale if shippers can fill their giant holds.

The jumbo vessels -- many longer than three football fields -- carry everything from strawberries and tea to iPods and motorcycles, for thousands of customers at once. The economies of scale can be great if shippers can fill their holds.

The MSC Daniela is a glimpse of the future. The size of an aircraft carrier, the ship completed its maiden run from Asia to Europe this month packed with 13,800 containers, or equivalent units, each big enough to contain all the contents of a three-bedroom house....MORE