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New mega container Triple E ships and what that could mean for you!
Maersk has begun receiving the first of 20 ordered new Mega ships (Triple E) capable of carrying 19,000 TEU (Twenty Foot Equivalent Unit). Maersk has just completed the maiden voyage of one of these vessels on July 28th, calling the port of Tanjung Pelepas. There has been a lot of debate about what this will mean on the Trans Pacific lanes and about the weak outlook in the Asia-Europe trade.
It is estimated that the total ship orders that are due for delivery this year will add 10 - 11% to the global container fleet. With this additional capacity, and only an estimated demand growth rate of between 4 - 5%, there is a 6% gap that will need to be covered. The steamship lines are looking to manage this gap by scraping equipment, slow-steaming, and more idling. Overall, what the steam ship lines are trying to accomplish with this influx of capacity is to stabilize the container pricing per TEU.
The Triple E vessels will be deployed on deep-sea trade lanes. This will cause a cascade of smaller Panamax vessels into the intra-Asia routes, particularly in the main ports in Southeast Asia that have the infrastructure to accommodate Panamax ships.
As regional players reduce their rates, they can begin to fill up the larger ships. Shippers may gain a better advantage at the negotiating table by reducing their overall cost per container. There will be no rate war in big trade lanes in the foreseeable future, except possibly in the emerging-Asia trades.
Contributor: Dan Chrovian, Allyn International Americas Logistics, Florida.