The global shipping industry is highly competitive, see page 56). and the move to bigger ships is driven by Table 4. Container ships on order, shipping companies always seeking to reduce the cost per TEU of moving a container (the ‘slot January 2017 TEU capacity cost’). Over the past decade, the global shipping market TEU capacity Number of % of total has suffered from oversupply. To try and maintain vessels TEU capacity business or win new business, shipping on order companies have responded to this oversupply by 0 3,999 239 15% – ordering and building even bigger ships, in constant pursuit of lower costs, usually measured 4,000 5,999 9 2% – in cost per TEU. In open markets this is a strange 6,000 7,999 1 <1% – industry response, with oversupply in an industry 8,000 11,999 53 18% – typically resulting in a rationalisation of firms. So far the shipping industry has resisted this trend, 12,000 15,999 60 26% – but we are starting to see more consolidation >16,000 62 38% within the industry. The current oversupply has Source: Adapted by Infrastructure Victoria from also led some shipping lines to form alliances, Drewry, Container Ship Fleet Forecast and which lets them combine their business and send Maritime Economic Assessment, 2017 fewer, bigger ships on the same route. So far this process has been fluid, with alliances ceasing Table 4 shows a breakdown of the container ships and reforming regularly. currently on order around the world. Almost all fall into two categories: small ships of less than ‘feeder’ The increasing supply of large ships has resulted 4,000 TEU or large ships of greater than 8,000 in some ships being scrapped after only ten TEU. Feeder ships are small ships used to service years, and also in shipping companies seeking to small ports in regional groups for example some accelerate the cascade of larger ships from Tasmanian and Pacific Island trade, which is only a to North–South routes (for more information small percentage of Port of Melbourne’s trade. on the lifecycle of ship and the cascade effect,
The global shipping industry is highly competitive, and the move to bigger ships is driven by shipping companies always seeking to reduce the cost per TEU of moving a container (the ‘slot cost’). Over the past decade, the global shipping market has suffered from oversupply. To try and maintain business or win new business, shipping companies have responded to this oversupply by ordering and building even bigger ships, in constant pursuit of lower costs, usually measured in cost per TEU. In open markets this is a strange industry response, with oversupply in an industry typically resulting in a rationalisation of firms. So far the shipping industry has resisted this trend, but we are starting to see more consolidation within the industry. The current oversupply has also led some shipping lines to form alliances, which lets them combine their business and send fewer, bigger ships on the same route. So far this process has been fluid, with alliances ceasing and reforming regularly. The increasing supply of large ships has resulted in some ships being scrapped after only ten years, and also in shipping companies seeking to accelerate the cascade of larger ships from to North–South routes (for more information on the lifecycle of ship and the cascade effect, see page 56). Table 4. Container ships on order, January 2017 TEU capacity TEU capacity Number of % of total vessels TEU capacity on order 0 – 3,999 239 15% 4,000 – 5,999 9 2% 6,000 – 7,999 1 <1% 8,000 – 11,999 53 18% 12,000 – 15,999 60 26% >16,000 62 38% Source: Adapted by Infrastructure Victoria from Drewry, Container Ship Fleet Forecast and Maritime Economic Assessment, 2017 Table 4 shows a breakdown of the container ships currently on order around the world. Almost all fall into two categories: small ‘feeder’ ships of less than 4,000 TEU or large ships of greater than 8,000 TEU. Feeder ships are small ships used to service small ports in regional groups for example some Tasmanian and Pacific Island trade, which is only a small percentage of Port of Melbourne’s trade.
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