Maersk Line does not recognize criticism of mega-vessels

"We're just following the growth in volumes," says Maersk Line in response to OECD's questioning of whether the mega container vessels actually provide real savings. The container shipowners' industry organization (WSC) also emphasizes that large vessels are not a new trend.

It is practically a law of nature that container vessels become bigger and bigger. The development of the ships is just following the development in global trade, according to Maersk Line.

A new report from the OECD questions the benefits of the mega container vessels, which Maersk Line and competitors have been putting in the water in recent years, and which we will only see more of in the years to come. But Maersk Line does not recognize the problems raised by the OECD, the carrier points out to ShippingWatch.

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I don't think that we with our vessels have put pressure on our surroundings . The development has been an interaction between us and the port operators. I think this is a natural consequence of growing global volumes. Jeg mener ikke, at vi med vores skibe har presset omverdenen. Udviklingen er sket i et samspil mellem os og havneoperatørerne. Jeg tror, at det er en naturlig følge af, at voluminerne gror på global basis.

Amdi Krogh, vice president for Head of Assets & Deployment

The main points from the OECD report 'Mega-Ships: Trends and Rationale' primarily address the fact that the savings from mega-vessels may be losing steam as the vessels grow bigger and more of them hit the water, just as it is primarily the engines on the ships that are actually behind the savings that container shipowners are currently making.

A second point states that the new mega-vessels are increasing pressure on the supply chain, for example at the terminals, the port areas and in general in the infrastructure of the countries in which mega-vessels call.

Meanwhile the OECD highlights that the many giant vessels lead to new investments in giant vessels and that this increases transport costs for shippers.

Another picture

Maersk Line does not recognize the scenario of problems painted by the OECD, Amdi Krogh, vice president for Head of Assets & Deployment at Maersk Line, tells ShippingWatch. He is responsible for investments in new vessels and containers, among other things.

OECD points to the fact that the savings from the coming mega-vessels are not nearly as big as with previous generations of vessels. How do you view this?

"When we look at our own numbers and calculations of the savings, we have numbers that are somewhat bigger than the results from OECD. The difference in savings on a twenty foot container on a new mega-vessel and an older 14,000 teu container ship can reach up to USD 500 in our calculations, which is somewhat higher than at OECD. So here, there is no doubt that the large ships provide real savings and are more cost efficient than older generations of vessels."

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What do you think about the statement that it is the engines to a larger extent than the size that constitutes the difference in the large container ships?

"It is completely true that new engines play a big part in making new mega-vessels more efficient but the reward from the engines takes place in interaction with the fact that there is a reward from having really big vessels."

OECD points to the large vessels increasing capacity in the market and that the savings are losing steam. Has the industry been too quick to order new ships?

"First of all, it is our conviction that container volumes in the global trade are increasing and we need to comply with this. Going forward, we expect that container volumes will grow by 3-5 percent in the period 2015-2018. We have clearly outlined a strategy aimed at growing at the pace of the market, and we will follow this strategy. I would rather not speculate about how the rest of the industry has succeeded in growing with the market. Secondly, we don't see a connection between mega-vessels and the utilization rate of these vessels. Larger vessels have not resulted in less utilization."

How do you relate to the pressure that OECD thinks that the concentration of service and freight has put on customers in the shape of fewer options for customers and ports?

"The only thing I will say is that when volumes go up, it requires investments in terminals and ports as well. This is a very natural consequence of the fact that volumes are growing in global trade. At Maersk Line, we invest in the most efficient vessels and of course we are in continuous discussions with out terminal operators about what they need, but we don't put increased pressure on them."

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The terminal company DP World, among several players, has stressed that the large container shipowners with mega-vessels have put pressure on the entire transport network. What responsibility do you have for that pressure?

"I don't think that we, with our vessels, have put pressure on our surroundings. The development has been an interaction between us and the port operators. I think this is a natural consequence of growing global volumes."

Development over decades

The OECD report 'Mega-Ships: Trends and Rationale', compiled by the International Transport Forum (ITF) under the OECD, arrived around the same time as the container industry's industry organization World Shipping Council (WSC) has compiled a response to why the mega-vessels make sense for the industry.

In the World Shipping Council's report, the organization states, among other things, that the development in mega-vessels is not new, but has been visible in recent decades, where shipowners have constantly outdone themselves with bigger and bigger vessels. So it is not just orders in recent years that are a trend.

At the same time, the World Shipping Council highlights that the mega-vessels are a natural part of life as a container shipowner. The shipowners have two tricks up their sleeves in a highly competitive environment: ordering mega-vessels or saving fuel. And for shipowners it would be natural to use both tricks.

The OECD has more reports on mega-vessels planned for the future.

OECD questions benefits of new ultra-large vessels

Container rates down 25 percent in five years

SeaIntel: The new mega-vessels sail on time 

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