The Port of Long Beach’s Acting Deputy Executive
Director, Dr. Noel Hacegaba, has published a white paper, Big Ships, Big Challenges, on the competitive impact that a new
generation of mega container cargo ships is having on US port authorities.
“The deployment of these mega ships presents
physical, financial and operational challenges that must be met by port
authorities across the country,” Hacegaba writes.
“Even for ports that will not see the mega vessels
call at their ports any time soon, the arrival of the larger ships is creating
a cascading effect in which the ships being replaced by mega vessels are being
deployed in the smaller trade lanes. Thus, the strain of larger vessels has the
potential to affect all ports, big and small.”
Dr. Hacegaba notes that the average size of
container ships has grown considerably in recent years, and the trend is likely
to continue for years to come.
According to Dr. Hacegaba’s report, ports around
the country are spending $46 billion in capital improvements. Shipping
companies are ordering larger ships to meet demand, while cutting the
operational costs they would otherwise incur by sending cargo on multiple
trips. As a result, ports of all sizes are struggling to ready themselves to
handle the larger vessels. Hacegaba states that regardless of a port’s size,
they face a demand to handle a larger class of vessels. In the coming years it
is projected that smaller vessels will be put out of service to make way for
larger ones. But the largest ships will go to the biggest ports, while today’s
larger ships will switch to smaller ports.
For the vessel operators, the major investments in
larger ships is straining their resources, so ocean carrier alliances and
consolidations are also being forged as a result. While this is not new to the
maritime industry, Hacegaba points out that they are “providing financial
uncertainty for port authorities.” The newly aligned or consolidated vessel
operators may move to different ports. A smaller port may spend millions on
fixing its infrastructure, and then lose a major tenant.
Regardless, he says, smaller ports that don’t
upgrade infrastructure, because of their struggle for funding, may face losing
business as small-sized fleets are phased out.