Gigantic container ships made sense but came at a cost
The traffic jam at the Suez Canal is starting to ease, but behemoth container ships such as the one that blocked that crucial passageway for almost a week and caused headaches for shippers around the world aren’t going anywhere.
Global supply chains were already under pressure when the Ever Given, a ship longer than the height of the Empire State Building and capable of carrying furnishings for 20,000 apartments, wedged itself between the banks of the Suez Canal last week. It was freed Monday, but it left behind “disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” according to A.P. MollerMaersk, the world’s largest shipping company.
The crisis was short, but it was also years in the making.
For decades, shipping lines have been making bigger and bigger vessels, driven by an expanding global appetite for electronics, clothes, toys and other goods. The growth in ship size often made economic sense: Bigger vessels are generally cheaper to build and operate on a per-container basis. But the largest ships can come with their own set of problems.
“They did what they thought was most efficient for themselves — make the ships big — and they didn’t pay much attention at all to the rest of the world,” said Marc Levinson, an economist and author of “Outside the Box,” a history of globalization. “But it turns out that these really big ships are not as efficient as the shipping lines had imagined.”
But despite the risks they pose, massive vessels still dominate global shipping. According to Alphaliner, a shipping data company, the global fleet of container ships includes
133 of the largest type — those that can carry 18,000 to 24,000 containers. An additional 53 ships are on order.
The industry has grown steadily since the 1950s, but as global trade accelerated in the 1980s, so did the growth of the shipping industry — and ship size.
In that decade, the average capacity of a container ship grew by 28 percent, according to the International Transport Forum, a unit of the Organization for Economic Cooperation and Development. Containership capacity grew again by 36 percent in the 1990s. Then, in 2006, Maersk introduced a massive new vessel, the Emma Maersk, which could hold about 15,000 containers, almost 70 percent more than any other vessel.
Today, the largest ships can hold as many as
24,000 containers — a standard 20-foot box can hold a pair of midsize SUVs or enough produce to fill one to two aisles in a grocery store.
The growth of the shipping industry and ship size has played a central role in creating the modern economy, helping to make China a manufacturing powerhouse and facilitating the rise of everything from e-commerce to retailers such as Ikea and Amazon. To the container lines, building bigger made sense: Larger ships allowed them to squeeze out savings on construction, fuel and staffing.
“Ultra Large Container Vessels are extremely efficient when it is about transporting large quantities of goods around the globe,” Tim Seifert, a spokesman for Hapag-Lloyd, a large shipping company, said in a statement. “We also doubt that it would make shipping safer or more environmentally friendly if there would be more- or less-efficient vessels on the oceans or in the canals.”
A.P. Moller-Maersk said it was premature to blame Ever Given’s size for what happened in the Suez. Ultralarge ships “have existed for many years and have sailed through the Suez Canal without issues,”
Palle Brodsgaard Laursen, the company’s chief technical officer, said in a statement.
But the growth in ship size has come at a cost. It has effectively pitted port against port, canal against canal. To make way for bigger ships, for example, the Panama Canal expanded in 2016 at a cost of more than $5 billion.
That set off a race among ports along the U.S. East Coast to attract the larger ships coming through the canal. Several ports, including those in Baltimore, Miami and Norfolk, Va., began dredging projects to deepen their harbors.
But while ports incurred costs for accommodating larger ships, they didn’t reap all the benefits, according to Jan Tiedemann, a senior analyst at Alphaliner.
“The savings are almost exclusively on the side of the carrier, so there was an argument that the carriers have been in the driving seat and have just pushed through with this big tonnage, while terminal operators, ports and, in some cases, the taxpayer, has footed the bill,” he said.