Academia.eduAcademia.edu

Outline

Title
Abstract
Introduction
Conclusions
References
All Topics
Engineering
Civil Engineering

In Search of the Link between Ship Size and Operations

Profile image of Eddy OmeyEddy Omey

2008, Transportation Planning and Technology

https://doi.org/10.1080/03081060802335109
visibility

…

description

30 pages

link

1 file

Abstract

Since 1990s the liner shipping industry has faced a period of restructuring and consolidation, and been confronted with a continuing increase in container vessel scale. The impact of these changes is noticeable in trade patterns, cargo handling methods and shipping routes, in short 'operations'. After listing factors influencing size, growth in container ship size is explained by economies of scale in deploying larger vessels. In order to quantify economies of scale, this paper uses the liner service cash flow model. A novelty in the model is the inclusion of '6000-20-foot Equivalent Unit (TEU) vessels and the distinction in costs between single and twin propeller units on ships. The results illustrate that scale economies have been Á and will continue to be Á the driving force behind the deployment of larger container vessels. The paper then assesses the link between ship size and operations, given current discussions about the increase in container vessel scale. It is found that (a) ship size and operations are linked; (b) optimal ship size depends on transport segment (deep-sea vs. short-sea shipping, SSS), terminal type (transhipment terminals vs. other terminals), trade lane (East-West vs. North-South trades) and technology; and (c) a ship optimal for one trade can be suboptimal for another.

Related papers

The Return on Investment of Big Containerships: The Impact of Port Time, Vessel Size and Multiple Ports of Call
shmuel yahalom

2019

Containerships are getting bigger (wider, longer and taller). Realizing the benefits of increasing containership size requires full capacity utilization to justify the high capital investment. Major container ports have not been able to increase the necessary productivities corresponding to the increase in ship size. Keeping up with the new vessel size discharge (import) and load (export) (D&L) technology requirements to service the large containerships have led the liner industry to form alliances that maximize carrying capacity and to call multiple ports per voyage to maintain schedule integrity. Evidence indicates that large containerships’ round-trip voyage times have increased substantially. The authors find that large containerships exhibit more time at the pier for D&L operations due to their large dimensions, notably the beam size. Each increase in beam size increased port time by 4.5 hours, and the increase in the number of ports of call by one percent increased port time b...

View PDFchevron_right
The impact of 50,000 TEU vessels on the container supply chain
Niels van Saase

2018

In this research, it will be assessed what the economic supply chain impact will be when 50,000 TEU vessels would sail around. The scope of the chain is limited to shipping lines, terminal operators, port authorities and consignees. Currently, the largest container vessels (OOCL Hong Kong, 21,413 TEU) already put large pressure on the chain because of the big peak volumes. Despite this, shipping lines are still ordering larger vessels. McKinsey (2015) predicts that vessels will even reach 50,000 TEU levels in 2066, based on economic forecasts and their vision on the shipping industry. Until now, most research has focused on the quantification of scale economies for shipping lines. Whereas, the impact on the rest of the chain is mostly qualitatively assessed. This research attempts to fill this gap by building a framework that enables the quantification of the rest of the chain. A case study has been performed on the route LL1, which is currently applied by the OOCL Hong Kong. This r...

View PDFchevron_right
The economic viability of container mega-ships
Mario Liu

Transportation Research Part E: Logistics and Transportation Review, 2006

In this study, we analyze the container mega-ship viability by considering competitive circumstances. We adopt a non-zero sum two-person game with two specific strategies based on different service network configurations for different ship sizes: hub-and-spoke for mega-ship and multi-port calling for conventional ship size. A shipping characteristic for each route is approximately optimized to set up pay-off (or profit) matrixes for both players. Throughout model applications for Asia-Europe and Asia-North America trades, the mega-ship is competitive in all scenarios for Asia-Europe, while it is viable for Asia-North America only when the freight rate and feeder costs are low.

View PDFchevron_right
Evaluating efficiency of international container shipping lines: A bootstrap DEA approach
Salvador Furió

Maritime Economics & Logistics, 2013

View PDFchevron_right
A new generation of containerships: cause or effect of the economic development?
David Araujo Diaz

Journal of Maritime Research, 2006

For years, and more and more insistently, globalization of economy and world trade is a common concept which is in all communications media. Nevertheless, freight market and shipbuilding have been traditionally globalized markets. Does it mean that nothing has happened to these sectors? Of course, not. The globalization of the world trade has had and is having a crucial effect on shipping and shipbuilding, as it can be seen in the growing sizes of the vessels used in the transport.

View PDFchevron_right
Assessing the Link between Vessel Size and Maritime Supply Chain Sustainable Performance
Dariusz Bernacki

Energies

This study determines the relationship between the increase in size of dry bulk carriers and container ships and the changes in sustainable shipping performance. It measures the elasticities of shipping costs for bulk carriers and container ships. Using regression, it derives the functions of the daily and unit costs of shipping with respect to the size of dry bulk carriers and container ships. The estimated daily and unit cost elasticities and cost models reveal significant but diversified impacts of vessel size on dry bulk and container shipping cost and its components, other operating capital, and fuel costs. Findings: Dry bulk carriers and containership size mean elasticities of daily operating costs estimates respectively: total operating costs 0.291 and 0.552, other operating cost (labor cost included) 0.238 and 0.328, capital costs 0.329 and 0.765, fuel costs 0.289 and 0.462; dry bulker and container ship unit shipping mean elasticity respectively: full operating costs (−0.75...

View PDFchevron_right
Structural Analysis of Shipping Fleet Capacity
Jingbo Yin

Journal of Advanced Transportation, 2018

With the unprecedented growth of the shipping transportation demand, substantial vessels have been built and delivered to the market. This has led to oversupply after the financial crisis in 2008 because of the abrupt decrease in transportation demand. Notwithstanding the importance of shipping market studies in the investment decision-making, there are relatively few empirical studies modelling the impacts on the structural changes of the fleet supply variables. By considering new orders, current fleet size, and demolitions in ship capacity supply, this study develops a systematic model in both bulker and container markets. The three-stage least squares method is employed to estimate the model to avoid endogenous issues. The primary finding suggests the significant impact of market, cost, and operational factors on fleet capacity supply. It also reveals the relatively rational activities in ordering new vessels and cautious in demolition decisions in the container market because of...

View PDFchevron_right
Introduction to global container shipping market
César Ducruet

2021

This chapter recalls and demonstrates deep changes in the way maritime transport had been reorganised with the ongoing advent of containerisation in the past decades up to the present time. This multifaceted approach to containerisation is not so common as often, specific aspects are well covered and analysed by scholars and professionals but without offering an all-encompassing view. A review of the complex and changing relationships between containerisation (technological change) and economic development, port and shipping line operations, and related impacts on former ways of doing things is necessary before widening the approach to other segments of the global value and supply chain, such as hinterlands and shipping networks, as described in the other chapters.

View PDFchevron_right
Estimating optimum container and vessel fleet sizes in a cyclic liner service using a holistic approach
Ioannis Lagoudis

International Journal of Shipping and Transport Logistics, 2010

The management of container fleets, regardless of type and size, is a rather costly operation. A number of strategies are present in the literature intending to efficiently and effectively tackle container utilisation emphasising on the position and allocation of empty containers. These strategies can be roughly categorised in two main groups of studies: container fleet management and fleet size planning. In this paper, a more holistic approach takes place by merging the problems of optimum vessel and container fleet size. The paper develops a model which intends to identify the factors that affect container utilisation in order to enable the effective and efficient operation and control minimising container idle time. Results indicate that the development of such a model can assist container shipping companies in improving their operations since decision-making processes relevant to container fleet size, vessel capacity utilisation, scheduling and frequency of service provided by the operators can be improved.

View PDFchevron_right
Determinants and strategies for the development of container terminals
Francesca Medda

Journal of Productivity Analysis, 2012

The paper examines an important player in the container industry: the container terminal. We evaluate how terminal efficiency operation is affected by the following factors: terminal type, operation type, scale efficiency and returns to scale. In so doing, we test how the typology and operation of terminals and the level of scale efficiency that a terminal can achieve, represent significant factors in the development and growth of the container terminal industry. The analysis is based on the assessment of 165 container terminals worldwide. We develop the estimation through the application of stochastic frontier analysis. We demonstrate that container terminals are more efficient than multipurpose terminals, and that, compared with local operators, global terminal operators do not have a dominant position in international maritime trade in terms of productivity and efficiency. However, global terminal operators appear to be more dominant than local operators when we examine the Mediterranean Basin. In the final part of the paper we suggest how resource-constrained container terminals may improve their scale efficiency and identify general strategies related to container terminal investments.

View PDFchevron_right

References (38)

  1. Akiyama, A., Horn, G. & Wong, K. M. (2002) Structural design challenges of ultra large container ships, in: Pacific 2002 International Maritime and Naval Expo & Conference, Sydney, January 29ÁFebruary 1.
  2. Baumol, W. (1982) Contestable Markets and the Theory of Industry Structure (New York: Harcourt Brace Jovanovich).
  3. Blauwens, G., Vandaele, N., Van De Voorde, E., Vernimmen, B. & Witlox, F. (2006) Towards a modal shift in freight transport? A business logistics analysis of some policy measures, Transport Reviews, 26(2), pp. 239Á251.
  4. Brooks, M. R. (2000) Sea Change in Liner Shipping: Regulation and Managerial Decision- Making, in a Global Industry (Oxford: Pergamon Press).
  5. BRS (2008) Shipping and Shipbuilding Markets (Neuilly sur Seine: Barry Rogliano Salles).
  6. Containerisation International, various editions (London: Informa Maritime & Transport).
  7. Cullinane, K. & Khanna, M. (1999) Economies of scale in large container ships, Journal of Transport Geography, 33(2), pp. 185Á208.
  8. Cullinane, K. & Khanna, M. (2000) Economies of scale in large containerships: Optimal size and geographical implications, Journal of Transport Geography, 8(3), pp. 181Á195.
  9. Drewry Shipping Consultants (2001) Post-Panamax Containerships Á the Next Generation (London: DSC Consultants).
  10. Drewry Shipping Consultants (2005) The Drewry Annual Container Market Review and Forecast 2004/2005 (London: DSC Consultants).
  11. Drewry Shipping Consultants (2006) The Drewry Annual Container Market Review and Forecast 2005/2006 (London: DSC Consultants).
  12. Drewry Shipping Consultants (2007a) The Drewry Container Market Review Á 2006/2007 (London: DSC Consultants).
  13. Drewry Shipping Consultants (2007b) Ship Operating Costs Annual Review and Forecast Á 2006/ 2007 (London: DSC Consultants).
  14. European Commission (2005) The Application of Competition Rules to Liner Shipping (Luxembourg: DG Comp).
  15. Fairplay (2005) Port and Terminals Guide Á 2005Á2006 (London: Fairplay publications).
  16. Fossey, J. (1990) Top 20 Carriers Consolidate, Containerisation International, June, pp. 46Á51. Goss, R. O. (1971) The Economies of Size in Dry Bulk Carriers (London: HMSO).
  17. Ham, J. C. (2004) The feasibility of megacontainer vessels, International Journal of Transport Economies, Engineering and Law, 25/26, pp. 89Á98.
  18. Heaver, T. D. (1968) The Economics of Vessel Size (Ottawa, Canada: National Harbour Board).
  19. Imai, A., Nishimura, E., Papadimitriou, S. & Liu, M. J. (2006) The economic viability of container mega-ships, Tranportation Research Part E-Logistics and Transportation Review, 46(1), pp. 21Á41.
  20. Jansson, J. O. & Shneerson, D. (1982) The optimal ship size, Journal of Transport Economies and Policy, 16(3), pp. 217Á238.
  21. Christa Sys et al.
  22. Jansson, J. O. & Shneerson, D. (1987) Liner Shipping Economics (New York: Chapman and Hall).
  23. Kendall, P. M. (1972) The theory of optimal ship size, Journal of Transport Economies and Policy, VI(2), pp. 128Á146.
  24. Lim, S. (1994) Economies of container ship size: a new evaluation, Maritime Policy and Management, 21(2), pp. 149Á160.
  25. Lim, S. (1998) Economies of scale in container shipping, Maritime Policy and Management, 25(4), pp. 361Á373.
  26. Lipczynski, J., Wilson, J. & Goddard, J. (2005) Industrial Organisation, an Analysis of Competitive Markets (Essex: Prentice Hall).
  27. Lloyd's list (2004) Ports of the World Á 2004 (London).
  28. McLellan, R. G. (1997) Bigger vessels: How big is too big?, Maritime Policy and Management, 24(2), pp. 193Á211.
  29. Notteboom, T. (2000) Logistieke ontwikkelingen in het voorland-achterland continuu ¨m (Antwerp: unpublished PhD dissertation).
  30. OECD Glossary of Statistical Terms, online available http://stats.oecd.org/glossary/ Á consulted on 21 June 2008.
  31. Port Glossary, online available http://www.portofantwerp.com Á consulted on 21 june 2008.
  32. Rijsenbrij, J. C. (2001) Impact of tomorrows ships on landside infrastructure, TOC2001. Rizvi, Z. (2003) The containership: How big?, IAPH Conference, Durban.
  33. Stopford, M. (2002) Is the drive for ever bigger containerships irresistible? in: MD Clarkson research, Lloyd's List Shipping Forecasting Conference, 26th April 2002.
  34. Stopford, M. (2004) Maritime Economics (London: Routledge).
  35. Talley, W. K. (1990) Optimal containership size, Maritime Policy and Management'', 17(3), pp. 165Á175. UNCTAD (various editions) Review of Maritime Transport (Geneva, Switzerland: United Nations).
  36. Van de Voorde, E. (2005) What future the maritime sector? Some considerations on globalisation, co-operation and market power, in: Kanafani, Adib and Katsuhiko Kuroda (Eds) Global Competition in Transportation Markets: Analysis and Policy Making, Research in Trans- portation Economics, pp. 253Á277 (Amsterdam, The Netherlands: Elsevier JAI).
  37. Wijnolst, N., Scholtens, M. & Waals, F. (1999) Malacca-Max. The Ultimate Container Carrier (Delft, The Netherlands: University Press).
  38. Witlox, F. & Vandaele, E. (2005) Determining the monetary value of quality attributes in freight transportation using a stated preference approach, Transportation Planning and Technology, 28(2), pp. 77Á92.

Related papers

Economies of scale in large containerships: optimal size and geographical implications
Kevin P B Cullinane

Journal of Transport Geography, 2000

In recent years, liner shipping has experienced an explosion in containership size. This is explained by the economies of scale in utilising such ships. This paper presents a model which quanti®es the economies of scale in operating large containerships. A sensitivity analysis is conducted to test the eect of various input scenarios and the results analysed to determine optimal containership size with respect to dierent operational scenarios. Inferences are then drawn concerning the optimal deployment of the existing¯eet of large containerships, likely future trends in containership size and deployment and the impact these trends will have upon container operations, logistical systems and ports.

View PDFchevron_right
Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions
Theo Notteboom

Maritime Economics & Logistics

The introduction of ever-larger containerships is a much-discussed topic in academic and business circles. The largest containership size has evolved from about 5500 TEU in 1995 to more than 23,000 TEU in 2019. The economic rationale for further scale increases in ship size is largely dependent on the current and future market conditions in the container shipping market, the adaptive capacity of ports and terminals (both economically and technologically) and, more recently, environmental requirements and considerations. This paper evaluates under which economic, operational and environmental conditions and expectations, shipping companies are likely to push the ultra-large containership (ULCS) size from 18,000 to 20,000 TEU to 25,000 TEU. Differences in both annual container slot cost and more comprehensive cost-benefit measures are assessed under different key market-based and operational conditions. The basic cost parameters for 20,000 TEU and 25,000 TEU vessels were estimated using a regression analysis applied to actual data of vessels up to 18,000 TEU. Our findings show that a further scale increase to a 25,000 TEU ULCS still generates economies of scale. However, very low freight rates, i.e. even below the poor freight rates of 2016-2017, and low load factors would not be conducive to the economic viability of 25,000 TEU ships, compared to smaller ULCSs. This study complements and updates the findings of previous studies (which focused on much smaller ship sizes) and contributes to the ongoing academic and corporate discussion on drivers and impediments of scale increases in vessel size by explicitly incorporating time-and context-dependent factors affecting optimal ship size.

View PDFchevron_right
On the Ongoing Increase of Containership Size
Simme Veldman

Advances in Maritime Logistics and Supply Chain Systems, 2011

For port planning purposes the development of the size of containerships is of great importance. Parties involved continuously try to beat competitors by creating the possibility to accommodate ships bigger than existing ones. With information available on vessel particulars and new building prices for fully cellular Post-Panamax container ships reaching up to about 14,000 TEU it is possible to conduct a proper statistical analysis of economies of ship size. Results show that economies of ship size, expressed as the elasticity of costs as a function of ship size, differ only slightly from those of ships up to Panamax.

View PDFchevron_right
Scale Diseconomies and Efficiencies of Liner Shipping
Yui Lau, Tsz Leung Yip

2010

In the context of liner shipping, carrying capacity can be seen as a key resource to strive for better firm performance. The liner shipping market nowadays has entered a phase in which liner shipping companies (LSCs) reap economies of scale. The concept of economies of scale has led the industry to grow by enlarging its capacity and firms allocate more ships to offer shipping services in the worldwide market. However, the results of enlarged capacity may be uncertain. By examining empirical data (from 1997 to 2008), this paper investigates the relationship between capacity and firm performance in the liner shipping industry and attempts to use an S-curve to describe their relationship. The findings suggest that the S-curve is robust. Furthermore, this study attempts to provide theoretical basis for shipping lines to determine the optimal carrying capacity.

View PDFchevron_right
The optimal ship sizes of container liner feeder services in Southeast Asia: a ship operator's perspective
Adolf Ng

Maritime Policy & Management, 2008

View PDFchevron_right

Related topics

  • Engineering
  • Civil Engineering
  • Transportation
  • Market Survey
  • Economy of Scale

    • Cited by

    Impact of megaships on the performance of port container terminals
    Enrico Musso

    Maritime Economics & Logistics

    Following the advent of mega-ships, the performance requirements of container terminals have increased significantly, highlighting necessary changes in their layout, infrastructure and equipment. We focus on the impact of mega-ships on a terminal, within the port network of the Italian region of Liguria, in terms of its ability to manage the flow of imports from arrival to inland destinations. We use discrete event simulation techniques to analyze the operations of a terminal and evaluate the relevant performance indices in different scenarios, which vary as a function of the call size of the larger containerships. The possibility of guaranteeing a more balanced modal split (favoring rail transport) for the inland distribution of containers is also evaluated. Dwell times at the yard and turnaround times at the berth are considered, with the objective of achieving a modal split of inland transport consisting of no less than 40% rail. Our results show that this objective can be achieved if a higher dwell time for outgoing containers is allowed.

    View PDFchevron_right
    A decision support tool for container terminal optimization within the berth subsystem
    Elen Twrdy

    Transport

    The article deals with a current problem faced by all ports: how to enable container terminals to keep up with the development of container ships, which, due to economies of scale, are constantly increasing in size. One solution that can help small container ports solve this problem is a use of a Decision Support Tool (DST). The DST is based on simulations and identifications of the container terminal components that require optimization for the reception of the desired ship size in a given port. It consists of the six parts of the terminal that define the operational ship-to-shore system that determines the quality of service when a ship is in the port. A DST was tested on the real data of twelve Mediterranean container terminals. Special focus was made on the optimization possibilities of the container terminal in the port of Koper.

    View PDFchevron_right
    The impact of ship size on ports’ nautical costs
    Gaston Tchang

    Much is known about transport costs at sea and costs made at terminals in ports. About costs, made by ports to provide nautical facilities (incl. infrastructure) and services, not much research is done yet. This paper estimates the impact of increasing ship sizes on costs made by the Port Authority of Amsterdam when providing nautical facilities and services by using hedonic pricing techniques. We have rather unique data on ship's sizes and harbour dues paid per ship for over 25 years for ships that visited the Port of Amsterdam. Harbour dues paid are used as a proxy for the costs of nautical facilities and services. We have found nearly constant returns to scale, when volume is used as a measure of a ships' size. An increase in average ship size with 1,000 tonnes deadweight will result in approximately €2 million additional yearly costs (an increase of the average ship size of six percent results in an increase of nautical costs with nearly the same percentage). Our results can be used by Port Authorities and port operators (in case of landlord ports) to estimate costs to be made for providing nautical facilities and services in the near future. KEYWORDS Constant returns to scale; harbour dues; port sea shipping. Of the costs made in ports 5-15% are port charges/harbour dues (Wilmsmeier 2007). Some research is done on costs made in ports, such as costs made for infrastructure, labor, administration and amortisation (see e.g. Núñez-Sánchez 2013; Jara-Díaz et al. 2002; Coto-Millan, Banos-Pino, and Rodriguez-Alvarez 2000). In those studies costs are not related to visiting ships. Bergantino

    View PDFchevron_right
    A Simulation Approach to the Definition of the Subsystems Parameters in Small Container Terminals
    Elen Twrdy

    Journal of Marine Science and Engineering

    This article deals with the extremely difficult problem faced by a large number of smaller ports: how to enable small container terminals to simultaneously receive two ships of post-Panamax size, and at the same time provide effective transshipment operations on an individual terminal subsystem, which would enable the fast turnaround of the ship in port and at the same time provide the port the possibility to increase annual traffic. For this purpose, a simulation approach was used in a hypothetical small size container terminal. The performed simulations covered all the berth-yard-berth operations focusing on the correct allocation of transfer mechanization to ensure optimal results on the sea side of the terminal. The results obtained were used to define the key parameters on the basis of which a Decision Support Tool was created. The aim of the Decision Support Tool is to help port operators to identify their current problems quickly and effectively and to give them an insight in...

    View PDFchevron_right
    Route Selection Decision-Making in an Intermodal Transport Network Using Game Theory
    Lucija Bukvić

    Sustainability

    Traveling through a transport network, or ordering and delivering packets, involves fundamental decision-making processes which can be approached by game theory: Rather than simply choosing a route, individuals need to evaluate routes in the presence of the congestion resulting from the decisions made by themselves and everyone else. In this paper, a game theory model for resolving route choices in transport network graphs is used. In the process of doing this, discovering a rather unexpected result known as Braess’s paradox, which shows that adding capacity to a network can sometimes actually cause congestion and an increase in transport costs. The decisions are made by non-cooperative players in a game theory environment known as prisoner’s dilemma. These methods are used to analyze routing problems by competing logistics operators on the transport network consisting of three Eastern Adriatic ports and an intermodal terminal in Budapest. The congestion game can be used in route se...

    View PDFchevron_right
    580 California St., Suite 400
    San Francisco, CA, 94104
    © 2025 Academia. All rights reserved