Largest ships
Economies of scale have dictated an upward trend in sizes of container ships in order to reduce expense. However, there are certain limitations to the size of container ships. Primarily, these are the availability of sufficiently large main engines and the availability of a sufficient number of ports and terminals prepared and equipped to handle ultra-large container ships. Furthermore, the permissible maximum ship dimensions in some of the world's main waterways could present an upper limit in terms of vessel growth. This primarily concerns the Suez Canal and the Singapore Strait.In 2008 the South Korean shipbuilder STX announced plans to construct a container ship capable of carrying 22,000 TEU, and with a proposed length of 450 metres and a beam of 60 metres. If constructed, the container ship would become the largest seagoing vessel in the world.
Since even very large container ships are vessels with relatively low draft compared to large tankers and bulk carriers, there is still considerable room for vessel growth. Compared to today's largest container ships, Maersk Line's 15,200 TEU Emma Mærsk-type series, a 20,000 TEU container ship would only be moderately larger in terms of exterior dimensions. According to a 2011 estimate, an ultra-large container ship of 20,250 TEU would measure 440m x 59m, compared to 397.71 x 56.40m for the Emma Mærsk class. It would have an estimated deadweight of circa 220,000 tons. While such a vessel might be near the upper limit for a Suez Canal passage, the so-called Malaccamax concept (for Straits of Malacca) does not apply for container ships, since the Malacca and Singapore Straits' draft limit of about 21 metres is still above that of any conceivable container ship design. In 2011, Maersk announced plans to build a new "Triple E" family of containerships with a capacity of 18,000TEU, with an emphasis on lower fuel consumption.
In the present market situation, main engines will not be as much of a limiting factor for vessel growth either. The steadily rising expense of fuel oil has prompted most container lines to adapt a slower, more economical voyage speed of about 21 knots, compared to earlier top speeds of 25 or more knots. Subsequently, new-built container ships can be fitted with a smaller main engine. Engine types fitted to today's ships of 14,000 TEU are thus sufficiently large to propel future vessels of 20,000 TEU or more. Maersk Line, the world's largest container shipping line, nevertheless opted for twin engines (two smaller engines working two separate propellers), when ordering a series of ten 18,000 TEU vessels from Daewoo Shipbuilding in February 2011. The ships will be delivered between 2013 and 2014.
Freight market
The act of hiring a ship to carry cargo is called chartering. Outside of special bulk cargo markets, ships are hired by three types of charter agreements: the voyage charter, the time charter, and the bareboat charter. In a voyage charter, the charterer rents the vessel from the loading port to the discharge port. In a time charter, the vessel is hired for a set period of time, to perform voyages as the charterer directs.
In a bareboat charter, the charterer acts as the ship's operator and
manager, taking on responsibilities such as providing the crew and
maintaining the vessel. The completed chartering contract is known as a charter party.
The United Nations Conference on Trade and Development, or UNCTAD, in its 2010 Review of Maritime Trade tracks two aspects of container shipping prices.
The first is a chartering price, specifically the price to time-charter
a 1 TEU slot for a 14 metric ton cargo on a container ship. The other is the freight rate, or comprehensive daily cost to deliver one-TEU worth of cargo on a give route. As a result of the late-2000s recession, both indicators showed sharp drops during 2008–2009, and have shown signs of stabilization since 2010.UNCTAD uses the Hamburg Shipbrokers’ Association (formally the Vereinigung Hamburger Schiffsmakler und Schiffsagenten e. V. or VHSS for short) as its main industry source for container ship freight prices. The VHSS maintains a few indices of container ship charter prices. The oldest, which dates back to 1998, is called the Hamburg Index. This index considers time-charters on fully cellular containerships controlled by Hamburg brokers. It is limited to charters of 3 months or more, and presented as the average daily cost in U.S. dollars for a one-TEU slot with a weight of 14 metric tons. The Hamburg Index data is divided into ten categories based primarily on vessel carrying capacity. Two additional categories exist for small vessels of under 500 TEU that carry their own cargo cranes. In 2007, VHSS started another index, the New ConTex which tracks similar data obtained from an international group of shipbrokers.
The Hamburg Index shows some clear trends in recent chartering markets. First, rates were generally increasing from 2000 to 2005. From 2005 to 2008, rates slowly decreased, and in mid-2008 began a "dramatic decline" of approximately 75%, which lasted until rates stabilized in April 2009. Rates have ranged from $2.70 to $35.40 in this period, with prices generally lower on larger ships. The most resilient sized vessel in this time period were those from 200–300 TEU, a fact that the United Nations Council on Trade and Development attributes to lack of competition in this sector. Overall, in 2010, these rates rebounded somewhat, but remained at approximately half of their 2008 values. As of 2011, the index shows signs of recovery for container shipping, and combined with increases in global capacity, indicates a positive outlook for the sector in the near future.
UNCTAD also tracks container freight rates.
Freight rates are expressed as the total price in U.S. dollars for a
shipper to transport one TEU worth of cargo along a given route Data is given for the three main container liner routes: U.S.-Asia, U.S.-Europe, and Europe-Asia.
Prices are typically different between the two legs of a voyage, for
example the Asia-U.S. rates have been significantly higher than the
return U.S.-Asia rates in recent years.
Generally, from the fourth quarter of 2012 through the third quarter of
2013, both the volume of container cargo and freight rates have dropped
sharply. In 2013, the freight rates on the U.S.–Europe route were sturdiest, while the Asia-U.S. route fell the most.
Liner companies responded to their overcapacity in several ways. For
example, in early 2013, some container lines dropped their freight rates
to zero on the Asia-Europe route, charging shippers only a surcharge to
cover operating costs. They decreased their overcapacity by lowering the ships' speed (a strategy called "slow steaming") and by laying up ships. Slow steaming increased the length of the Europe-Asia routes to a record high of over 40 days.
Another strategy used by some companies was to manipulate the market by
publishing notices of rate increases in the press, and when "a notice
had been issued by one carrier, other carriers followed suit."
The Trans-Siberian Railroad (TSR) has recently become a more viable alternative to container ships on the Asia-Europe route. This railroad can typically deliver containers in 1/3 to 1/2 of the time of a sea voyage, and in late 2013 announced a 20% reduction in its container shipping rates. With its 2013 rate schedule, the TSR will transport a forty-foot container to Poland from Yokohama for $2,820, or from Pusan for $2,154.
( Rates are Not actual but it is just an Average rate for a discussion )
The Trans-Siberian Railroad (TSR) has recently become a more viable alternative to container ships on the Asia-Europe route. This railroad can typically deliver containers in 1/3 to 1/2 of the time of a sea voyage, and in late 2013 announced a 20% reduction in its container shipping rates. With its 2013 rate schedule, the TSR will transport a forty-foot container to Poland from Yokohama for $2,820, or from Pusan for $2,154.
( Rates are Not actual but it is just an Average rate for a discussion )
