Mega-Ships: Disruptive Innovation or Overstretch?

Transcription

1 Mega-Ships: Disruptive Innovation or Overstretch? Olaf Merk Exponaval 2016: Trans-Port 2016 Conference 30 November 2016, Viña del Mar, Chile

2 2 Disruptive shipping innovations 1820s 1960s 2010s

3 3 Development of container ship size Source: ITF/OECD (2015), The Impact of Mega-Ships

4 4 The mega-ship era All slaves to some defunct economic idea Need to cut costs Lower freight rates Bigger ships Fleet overcapacity Source: ITF/OECD elaborations

5 5 The mega-ship system How to handle them? Mega-ship How to finance them? How to fill them? Mega-port Mega-carrier How to avoid being crushed? Source: ITF/OECD elaborations

6 6 The mega-ship problem Mega-ship More peaks Higher costs Steeper risks Mega-port Less port calls Iron grip Mega-carrier Source: ITF/OECD elaborations

7 7 The mega-ship problem Emission peaks Traffic congestion Mega-ship Less choice for shippers Labour flexibility Automation More peaks Higher costs Steeper risks More accident risks Port-city disintegration Mega-port Less port calls Iron grip Mega-carrier Lower return on investment The certain death of certain ports Source: ITF/OECD elaborations

8 Hourly container arrivals/departures from/to hinterland GT 8 More peaks Traffic congestion Hourly container arrivals/departures by road Hourly container arrivals/departures by rail GT hourly volume of container ships moored over GT GT hourly volume of container ships moored <= GT Source: ITF/OECD (2015), The Impact of Mega-Ships

9 9 More peaks Emission peaks Rather than emissions per box, focus on emission peaks, which are related to ship size Source: Kattner et al. 2015

10 10 More peaks Labour flexibility Automation Port-cities will be the cities that never sleep, unless everything gets automated Container arrivals/departures by road transport per hour of day in Source: ITF/OECD (2015), The Impact of Mega-Ships

11 11 Port-city disintegration Need for more yard space Quay lines, truck traffic Land-use conflicts Non-urban ports Off shore ports Shanghai Rotterdam Singapore Venice? Spatial disintegration Economic disintegration

12 12 Higher costs Lower return on investment More infrastructure costs, at least partly covered by port-cities More volatility of market shares More pressure of carriers on tariffs

13 13 Higher costs Lower return on investment Source: ITF/OECD (2015), The Impact of Mega-Ships

14 Deviation from trend-line growth (million TEUs) 14 Higher costs Lower return on investment More volatile market shares, so higher risks for ports and lower return on investment 1,5 1,0 0,5 0,0-0,5-1,0-1,5 Rotterdam Hamburg Antwerp Bremen/Bremerhaven Le Havre Zeebrugge Dunkirk Source: ITF/OECD elaborations

15 Market share container lines (%) 15 The iron grip of carriers The certain death of certain ports The top 4 carriers had 23% market share in 2000, almost 50% in Top 4 Top 10 Source: ITF/OECD elaborations based on data from Alphaliner

16 16 The iron grip of carriers The certain death of certain ports Some ports are almost fully dependent on one alliance, so very vulnerable 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 2M O3 CKYHE G6 Rest 0% Container ship capacity on Far East-Med route (2015) Source: ITF/OECD elaborations based on data from Dynamar 2015

17 17 The iron grip of carriers The certain death of certain ports Container shipping alliances a blessing? Ask Zeebrugge Photo credit: Henk Claeys

18 18 The iron grip of carriers The certain death of certain ports Towards a graveyard of container ports? 1,0 0,8 0,6 0,4 0,2 0,0 Taranto 0,6 0,5 0,4 0,3 0,2 0,1 0,0 Malaga 0,3 0,2 0,1 0,0 Savona 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 Thamesport Yearly container port volume (million TEUs) Source: ITF/OECD elaborations

19 19 Steeper risks More accident risks

20 20 Steeper risks Less choice for shippers Service frequency going down, less direct port pairs Weekly Asia-Europe services 8 7 Weekly Asia - ECSA services Source: ITF/OECD elaborations based on SeaIntel data

21 21 Why is it going to get worse? More mega-ships are coming More overcapacity is coming so more pressure from carriers on ports More concentration is coming, so less port calls, less service frequency and Bigger call sizes (peaks) are coming A wave of cascading effects is coming

22 Mega container ships (number) New-built ship capacity (million TEUs) 22 More mega container ships are coming 53 mega-ships in 2016, 108 in mln TEU extra ship capacity over , 50% of which >13,000 TEU ships 120 2, ,5 60 1, , , k 7-13k 13-17k 17-22k Source: ITF/OECD elaborations based on data from Clarksons Research Services

23 More container ship overcapacity is coming Growth world container fleet (TEU capacity) Growth containerised seaborne trade (tonnes) Source: ITF/OECD elaborations

24 Index (2005 = 100) Gross tonnage (mln) 24 More container ship overcapacity is coming Orders Cancelled Scrapped Growth world container fleet (TEU capacity) Growth containerised seaborne trade (tonnes) ITF/OECD elaborations based on IHS and Clarkson data

25 25 More concentration is coming Alliances: From four to three Upcoming potential mergers: Hapag Lloyd UASC Remnants Hanjin Japanese HMM Hamburg Sud Conditional to approval of competition authorities

26 Average number of moves 26 Bigger call sizes Mega-ship has not brought mega-peak yet, but this is about to change T1 T2 T3 T4 T5 T6 T Ship capacity (in 1000 TEUs) Average call size per container ship calls in seven selected terminals in 2014 Source: ITF/OECD elaborations based on data from global terminal operators

27 Average vessel size (TEU) 27 A wave of cascading effects Asia - N Eur Asia - Med Asia - ECSA Asia - USWC Asia - USEC N Eur - ECSA USEC - ECSA N Eur - USEC

28 Share of calls in size class Share of calls in size class 28 A wave of cascading effects 100% 100% 90% 90% 80% 18,000-22,000 TEU 80% 18,000-22,000 TEU 70% 14,000-17,999 TEU 70% 14,000-17,999 TEU 60% 10,000-13,999 TEU 60% 10,000-13,999 TEU 50% 6,000-9,999 TEU 50% 6,000-9,999 TEU 40% 30% 20% 10% 4,000-5,999 TEU 2,000-3,999 TEU 1,000-1,999 TEU up to 999 TEU 40% 30% 20% 10% 4,000-5,999 TEU 2,000-3,999 TEU 1,000-1,999 TEU up to 999 TEU 0% % San Antonio Valparaiso Source: ITF/OECD (2016), Ports Policy Review of Chile

29 Share of calls in size class Share of calls in size class 29 A wave of cascading effects 100% 100% 90% 90% 80% 70% 18,000-22,000 TEU 14,000-17,999 TEU 80% 70% 18,000-22,000 TEU 14,000-17,999 TEU 60% 50% 40% 30% 20% 10% 0% ,000-13,999 TEU 6,000-9,999 TEU 4,000-5,999 TEU 2,000-3,999 TEU 1,000-1,999 TEU up to 999 TEU 60% 50% 40% 30% 20% 10% 0% ,000-13,999 TEU 6,000-9,999 TEU 4,000-5,999 TEU 2,000-3,999 TEU 1,000-1,999 TEU up to 999 TEU San Vicente Coronel Source: ITF/OECD (2016), Ports Policy Review of Chile

30 30 Mitigating the impact of mega-ships Port level City level Traffic congestion Emission peaks Labour flexibility Automation Port-city disintegration Appointment systems Incentives off-peak hours Incentives: green port tariffs Rules: fuel, speed, age Infrastructure: shore power Labour pools Labour relations Port planning Communication Truck parking areas Congestion charge Emission zones Truck bans Opening hours Training and schooling Social policies Metropolitan networks Maritime waterfronts Communication Source: ITF/OECD elaborations

31 31 Solving the mega-ship problem Regulation Incentives Planning Mega-ship Ship size Big pays more Where are we going? Mega-carrier Competition State aid conditions What is needed? Mega-port Port mandate Investments if carriers commit Where is it needed? Source: ITF/OECD elaborations

32 Thank you Olaf Merk