World’s biggest container ships may not be the cure the lines hoped for………..

From the window of the Norman Global Logistic office in Felixstowe you can see the gargantuan gantry cranes moving into the port for assembly.

Within the next few months the UK’s busiest port will have 12 cranes capable of handling the world’s largest container ships for some years to come.

Which is just as well because ultra-large container ships greater than 18,000 TEU will comprise 61% of the tonnage deployed on Asia-Europe by the end of 2018, potentially lowering freight rate levels and putting destination ports, that are not as well prepared as Felixstowe under massive pressure.

The shipping lines have long maintained that such large vessels would provide the best economy of scale on the busiest trades, like the Asia to North Europe trade.

However there are serious implications of having capacity skewed so heavily in favour of ultra-large vessels. It may serve as a dampener on future freight rate levels, as they will be influenced by the low slot costs offered by the ultra-large vessels in comparison to significantly smaller vessels.

And then you have more capacity on the vessels than volume demand……………..