Do Mega-Ships mean Mega-Investment?

Posted by PortVision

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As manufacturers all over the world look to bring down their transportation costs, a number of them have turned to shipping companies that promise larger ships. These so-called Mega-Ships are able to transport record amount of cargo (containers, LNG, or crude), yet they present several logistical and financial challenges to the ports that host them.

The most obvious challenge facing ports is the need for improved infrastructure that can handle these ships. Specifically, ports need to have deeper berths, larger cranes and related infrastructure, and a plan to handle the increase in volume during peak operation times. Financially, ports need to come up with the money to fund these infrastructure improvements while still remaining competitive.

One of the first questions that arises when a person sees these ships is how the structure of a port needs to change. For example, the Super Post-Panamax Mega-ships need deeper berths, forcing many ports to dredge their approach channels and turning basins in order to accommodate them. Fortunately, advances in navigation technology have meant that most ports have not needed large-scale redesigns of their facilities. Mega-Ships have been able to access the majority of ports in existence today with precise navigational instruments.  

Once in those ports, however, the Mega-Ships have to be unloaded and re-loaded. This has caused several logistical issues, starting with the installation of larger cranes. As a Mega-Ship pulls up to a dock, it often takes several cranes and a carefully orchestrated unloading procedure to get the cargo off in an efficient manner. While smaller ships can typically be unloaded fairly quickly with a single crane, allowing the ship to move onto another port in a short amount of time, a Mega-Ship can stay in port for days longer, causing a backlog of ships waiting to dock if a port does not have a plan to unload and load the Mega-Ship as efficiently as possible.  

Obviously, these infrastructure improvements present a financial challenge to the ports, raising questions of where the money will come from. Since many ports are owned and controlled by a combination of government and private interests, many governing councils are working deals that will raise capital from a variety of different sources including taxes, loans, and private investment. The negotiations for these agreements can take years, however, and are often influenced by political issues that are outside of the port’s control.

As more shipping companies combine their resources to build Mega-Ships, ports around the world will need to change their physical and financial infrastructure to adapt. Longer passages, new draught restrictions, deeper berths, and increased numbers of larger cranes will need to be provided to safely and efficiently load and unload these ships. That will require an increased capital investment from everyone with a vested interest in their local port.

PortVision provides vessel tracking and maritime business intelligence products that help our customers make sense of the changing times. Our PortVision Advantage platform support detailed analysis of ship movements, transit times, and time at berth. For more information, visit www.portvision.com.

 

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Posted on Jul 14, 2015, 9:05:00 AM

Topics: Blog, CrudeOil, Supertankers, LNG