MARITIME ECONOMICS THE FAMILY OF CONTAINER SHIPS – FULL CONTAINER VESSELS Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Introduction Guess what??? Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons History Production growth International trade development Cargo protection – damage decrease Increase of shippers demand Cost reduction by automation History Containerization has its origins in early coal mining regions in England beginning in the late 18th century. Containerization has increased the efficiency of moving traditional break-bulk cargoes significantly, reducing shipping time by 84% and costs by 35%. IDEAL X was the first commercial successful container ship in 1956. Capacity = 58 ctnrs Nowadays containerships capacity reaches 18’000 TEUs (MAERSK Triple E-class) History T-2 oil tanker On April 26, 1956 the Ideal X carried 58 containers from Port Newark , New Jersey, to Port of Houston, Texas, where 58 trucks were waiting to be loaded with the containers History Container ships evolution http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/containerships.html History THE SPEED Some ships with huge power plant(s) and multiple screws could achieve speeds up to 28 knots. In 1972/73 Sea-Land took delivery of eight 33knot containerships capable of carrying 1900 TEU. This speed was realized by installing two steam turbines and two screws. However, they turned out to be an economic failure when fuel prices went skyward and the vessels were sold to the U.S. military. Nowadays service speed is in the 24-26 knot range. SS Regulus Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Technical Aspects INFRASTRUCTURE & PORT CALLS Base Ports (Hub) & Port-to-port service Feeder Ports • Port had the control of the cargo, • Vessel went to the port to get cargo, • There was always a vessel looking for cargo, so port did not invest in equipment, • Consequences: Vessels navigating below their capacity, • Ports with low performance. • Liner companies took the control, • Started to plan the itinerary which gave economic advantage (optimized vessel capacity = lower cost), • Consequences: competition between ports to attract liner services, • improvement in port investments, • Improvement on performance = efficiency and productivity. ...then things changed Source: STOP, F. (2009) Maritime Economics (3rd Edition) London and New York Technical Aspects INFRASTRUCTURE & PORT CALLS Modern container ports can stretch over vast areas of land and handle millions of tons of cargo each year. The Port of Singapore handles a vast array of cargo, including containers and conventional and bulk cargo Port designed to attend the demand of shipper lines. Source: http://www.ship-technology.com/features/feature75321/feature75321-2.html Technical Aspects Container Vessels Projects Ship Container = complex engineering project which should be taken in consideration: - Safety - Balance and stability - Resistance against the nature forces, - Profitability & Capacity, etc… http://forshipbuilding.com/ship-types/container-ship/ 1. bridge castle front, 2. deck containers, 3. foremast and mast top, 4. forecastle, 5. insulated containers in holds, 6. container refrigeration ducts, 7. double hull composed by a complex arrangement of steel plates and strengthening beams 8. passageway Bays / Rows / Tiers Technical Aspects Cargo Holds EFFICIENCY = ships are specially constructed to speed loading and unloading, and to efficiently keep containers secure while at sea. Cell Guides = strong vertical structures constructed of metal installed into a ship's cargo holds CARGO PLAN = Is the key to minimize the vessel time on berth http://en.wikipedia.org/wiki/Container_ship Technical Aspects LASHING SYSTEM Numerous systems are used to secure containers aboard ships, depending on factors such as the type of ship, the type of container, and the location of the container. Vessel and Cargo Safe! In general we have 3 systems: - lashing systems (secure containers to the ship) locking systems (the effectiveness of lashings is increased by securing containers to each other ) buttress systems ( = pillar = used on some large container ships - system of large towers attached to the ship at both ends of each cargo hold) http://en.wikipedia.org/wiki/Container_ship Technical Aspects INCIDENT - LASHING SYSTEM Technical Aspects CONTAINER - TYPES Dry storage container Open side storage container Flat rack container Refrigerated ISO containers Open top container Tanks Tunnel container Car carriers According to Drewry Maritime Research: Global container fleet = 32.9 million TEU in 2012** Dry container 92%, refrigerator 7%, tank 1% http://www.marineinsight.com/sports-luxury/equipment/16-types-of-container-units-and-designs-for-shipping-cargo/ Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Operations WHAT TO DO TO TRANSPORT CARGO IN A CONTAINER VESSEL? Operations 1st Step The Owner decides attend the demand using the maritime modal. This demand can be domestic (cabatoge) or an import / export operation. Operations 2nd Step Check which shipper line could attend with the best conditions (price, route, schedule). Should be in accordance with what was planned. Operations 3rd Step Inform the shipper line how many containers and what kind of goods will be loaded. Shipper line will inform your Booking number. Booking Number: reference number of your reservation that contains type of container, which vessel, dead line, Origin and Destination Port. Operations 4th Step With this #Booking number# you can provide the pick up of your empty container from the “depot”. DEPOT = is the local that shipper line storage your empty and full containers. Operations 5th Step Load the cargo inside the container – in this stage it´s necessary to arrange all details to load the cargo in a safe way. Plan what´s necessary to maintain the integrity of the cargo and vessel during navigation. Steel Coil = 12 ton Operations 6th Step ORIGIN PORT load the FULL container in the vessel. Attention to the dead-line to avoid losing the ship. Operations 7th Step During your cargo navigation it´s possible to track & trace. This information comes from the Shipper Line. Operations 8th Step DESTINATION PORT UNLOAD the containers Shipper Line gives some free days to pick up the FULL container and then return EMPTY in perfect condition. In this moment, DEPOT makes an inspection in the container, and if detected any damage caused by the cargo owner will pay this cost. Operations 9th Step The terminal UNLOAD the cargo. Use appropriate equipments to unload in a safe way and without damage. Operations 10th Step Final destination… Lessons learned and check which items shoud be improved!! Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Market of today Trends & Key Development of Global Container Ship Industry: How it looks now? Containerization has rapidly increased over the past 30 years; Standardization of transports constantly increases the intermodal transport from doorto-door, improves transit and turnaround times and reduces cargo damage; Containers continue to replace bulk and other forms of shipping goods, especially with specialized and higher value-added products; Sophisticated systems and controls are the key in creating a competitive advantage for container shipping companies. Market today Future of Vision The Role of Container Shipping on the Global Trade In comparison with DWT share of vessels and the share of the value carried, container ships carry 27 more seaborne trade than dry bulk carrier. In terms of value of the good, container shipping account for more than 50% of the global trade. Source : Review of Maritime Trade 2012 UNCTAD, EU Commission Press 28/03/2012 %16 of the seaborne trade tonnages are containerised. From the economic perspective, rise of the costs and low margin of earnings enforce companies to make alliances and oligopolies. Market of today Global Container Trade 1996-2013 (millions of TEU and annual growth) Source : Review of Maritime Trade 2012 UNCTAD Market of today Distribution of Container Ships among the Companies Source : Alphaliner Annual Review 2012 Market of today Trends & Key Development of Global Container Ship Industry: what it is challenged by? NEW SHIPPING ALLIANCES • TOP 3 container shipping companies of the world CMA CGM, Maersk Line and MSC Mediterranean Shipping Company SA have agreed to establish a long-term operational alliance on East – West trades, called the P3 Network. • The aim is to improve and optimize operations and service offerings. • The P3 Network will operate a capacity of 2.6 million TEU (initially 255 vessels on 29 loops) on three trade lanes: Asia – Europe, Trans-Pacific and Trans-Atlantic. Market of today Trends & Key Development of Global Container Ship Industry: Challenges NEW SHIPPING ALLIANCES: how are going do this? 42 % of the Asia-Europe market share 24 percent of the transpacific routes Maersk Line’s Lars Mikel Jensen will be the organization’s CEO Staff of approximately 200 will run the alliance from offices in London, UK and Singapore Between 40 and 42 percent of all transatlantic crossings Market of today Latest developments of Global Container Ship Industry: Facts and Figures Market of today Trends & Key Development of Global Container Ship Industry: what it is challenged by? Pricing volatile and demand driven, at the same time fuel cost and is unpredictable that makes margins volatile. Container shipping dependent on global trade, subject to economic fluctuations and is extremely seasonal, that increase uncertainty and limited ability of the shipping companies to influence the situation. The container market is struggling to handle surplus capacity in a period with low demand growth and an orderbook entirely filled by large postpanamax vessels. Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusıons Future Vision Gigantic Container Ship Circumnavigating Around World Modified version of Emma Maersk Carrying capacity 18.000 TEU 400 m. length , 59 m. beam , 14.5 m. draft , 165.000 DWT 50% less CO2 per container compared to average of the market Constructed by Daewoo Shipbuilding & Marine Engineering Source : www.worldslargestship.com Future Vision Malacca-max : The New Opportunity or Escapade Max Draught 21 m. , 400.0 m. length , 60.0 m. Beam , 18.000+ TEU Capacity Opportunities Threats • Operation cost per container goes down • The lesser ship the lesser CO2 emissions • Expected acceleration in economic growth • Competitive advantage • Twin propulsion requiring more maintenance • Port limitations • Utilisation of capacity • Oversupply in container market • Too many eggs in one Source : Long-Term Trends in Container Shipping – the Revised Fourth Revolution (Ashar, 2012), The future of containerization: perspectives from maritime and inland freight distribution ( Notteboom, Rodrigue 2009) , www.containershipping.com , The feasibility of mega container vessels ( van Ham, 2005) Future Vision World Merchandise Growth Trade and GDP* It is expected to be seen a recovery after the crisis GDP growth of among the countries is expected to increase in 2014 , consumption is forecasted to be core factor of the growth. The positive consequences of expanding to container shipping can be seen in the next years. 80% of world trade by volume is carried by sea Source : WTO 2013 Press Release , 19 September Future Vision Projections of Global Trade in terms of TEU(1) Source : Data Hub Trade Statistics 2013, Lloyds List Future Vision Projections of Global Trade in terms of TEU(2) Source : Data Hub Trade Statistics 2013, Lloyd List Future Vision Alterations of Global Trade Pattern in the Future Russia - Brasil – India – China – Republic of Korea will comprise more than 50% of the total grow GDP between 2011 and 2025. ( average %4.7 increase per year – for developed countries %2.3). It is forecasted that by 2050 60% of exports will go from developed Asia to emerging Asia. That means the future centre of trade will be SouthSouth trade. It is expected that Asian countries bloc will take lead from NAFTA and Eurozone by 2015 Acording to OECD report, by 2030 main trade corridor will not include US and Europe but extend Asian side Thailand and Vietnam Source : Review of Maritime Transport 2012, UNCTAD Future perspective For surviving in the storming market environment, container shipping companies are advised to keep the following route To be proactive and flexible Technical progress in line with infrastructure development Easiest for customers to do business with Table of Content Introduction History Technical Aspects Operations Market of Today Future Vision Conclusions Conclusion The container service is constantly changing to meet the needs of trade. By using containers to mechanize the transport of ‘general cargo’, it has, in Adam Smith’s words “opened the whole world to a market for the produce of every sort of labor”… Source: STOPFORD, M. (2009) Maritime Economics (3rd Edition) London and New York “ God must have been shipowner. He placed the raw materials far from where they were needed and covered two thirds of the earth with water.” Erling Naess “ Whosoever commands the sea commands the trade ; whosoever commands the trade of the world commands the riches of the world and consequently the world itself ” Knight Sir Walter Raleigh, 1650 THANK YOU, QUESTIONS?