The container carriers' wave of giant ships means that ports and port terminal companies are forced to invest several billion dollars in order to be able to service the ships. According to Drewry, European ports have either already used, or announced plans to use, USD 13.3 billion on projects to expand that ability to handle the new container ships, writes Bloomberg.
The ports are having a hard time handling the investments, as the investments have to be made while the economic crisis is still causing low volumes at the ports, which puts a significant strain on the ports' profit margins.
“Ports won’t any time soon be able to get to back to profitability levels seen before the 2009 crisis because of moderate utilization, slow growth and the additional capacity coming on stream within the next 24 months. It’s getting more difficult for ports to pass on rising costs to their customers, and a weak economy is not helping at all," says Henning Breiter, a Hamburg-based analyst at private bank Hauck & Aufhaeuser, to Bloomberg.
The increase in ship capacity is slowly becoming visible on Asia-Europe, where capacity reached a record-high 10,279 teu in the first quarter 2013, which is 7.6 percent more than in the same period 2012. Container ships have been getting bigger and bigger for many years now, and the size of the largest ships have quadrupled since 1992. ShippingWatch has previously reported that the ships could get even bigger.