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Do Mega Vessels benefit shippers or only the shipping lines?

Do Mega Vessels benefit shippers or only the shipping lines?

The introduction of mega vessels might be good business for the shipping lines but they are not necessarily beneficial for shippers, according to Chris Welsh, Director of Global & European Policy, Freight Transport Association (FTA).

“The mega vessels reduce unit costs for shipping lines but overall supply chain costs are increasing.”

He was speaking at the FTA session at Multimodal 2016 examining ‘The impact of mega shipping vessels and maritime alliances’.

Welsh said the introduction of the mega ships was a “from the hip” reaction to the world financial crisis without the shipping lines thinking through all the implications for the other stakeholders, including shippers, forwarders, hauliers and ports.

Amdi Krogh, Head of North European Liner Operations for Maersk Line, said that the mega ships had helped increase efficiency and drive down costs for shippers but agreed that “we need to have dialogue with the entire supply chain”.

Cameron Thorpe, Chief Executive, DP World London Gateway, said the benefit of mega ships is not realised unless the loading and unloading of containers is also more efficient.

“Many ports have cranes that are wide enough, but not high enough to handle the largest ships.”

Patrick Walters, Group Commercial Director, Peel Ports, said it was a valid question to ask “if carriers have lost sight of the end user”.

He explained that most shippers are part of a very fragmented cargo base so have to rely on forwarders and that “this morass of forwarding companies means visibility is totally obscured”.

The whole concept of shipping close to the origin or destination of the cargo – reducing costs and carbon footprint – was being lost as the mega vessels can discharge at only a handful of ports.

Welsh said the issue of transshipment was also a concern for many shippers as it increased the possibility of damaged or lost containers, as well as adding three to seven days to the delivery time.

Krogh said that Maersk had 600 vessels and only 20 were considered mega vessels as it understood very well that different trades needed different vessels.

“But we operate in a very low margin business whether we like it or not, so lower costs through mega vessels helps facilitate world trade.”

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