“Stimulating vessel construction without cargo should be discouraged”, was a statement heard at a June 18 House Transportation and Infrastructure forum.

“You have to have the customer base in place before you put a vessel in place”, the speaker added.

Such common sense remarks are rarely, if ever, heard nowadays in international shipping circles, and as a matter of fact, the above remarks weren’t uttered in those international circles. They were the observations offered by Thomas A. Allegretti, president and CEO for the American Waterways Operators, at the June 18 House round-table discussion dealing with short sea shipping.

Overly impressed by the 8,000, 10,000 and 12,000 TEU megaships being built for the largest international carriers, U.S. port officials are stumping for taxpayers to fund the expansion of their container ports. The fact that U.S. consumers, “the customer base”, are no longer on shopping binges, has yet to register with these officials, and even though published figures show a reduction in TEUs – at the 29 West Coast ports, no less – port authorities remain unfazed and continue their fund-raising activities.

“Growing the port” is the chant, and it sounds like this: “End of Port Cargo Slump Forecasted” … “As the U.S. economy bounces back” …”These ports should be ready for larger and larger ships that will go through the expanded Canal” … “The container market looks set to flourish in the years ahead” … “By 2010, Asia will be exporting 15 million more containers than U.S. ports can handle” … “Container ports on both the east and west coasts of North America are nearing capacity as trade – imports and exports – with China soars” … and on and on, as the economy spirals downward.

But A.P. Moeller – Maersk, the instigator of the “bigger-is-better” mentality, is singing a different tune. This company built the first leviathans but the “economies of scale” advantages these giants were supposed to produce failed to materialize. Serious financial reversals were the consequences of the firm’s miscalculations, and realizing that those advising against the construction of megaships were right after all, new and logical strategies were adopted. Once burned, twice shy …

Earlier this week we read the headline, “Maersk in second containership order spree”, and the story revealed that Maersk had ordered 16 containerships each with a declared capacity of 7,450 TEUs. This order was placed with South Korea’s Daewoo Shipbuilding, and it followed on the heels of an order for 18 container ships from Hyundai, each having a capacity of 4,500 TEUs. Michel Deleuran, Maersk’s Senior Vice President and head of network and product stated that “This order will enable us to continue to offer competitive container shipping based on a modern, economical, and environmentally friendly fleet”. [Translation? Bigger isn’t better after all.]

When AXS-Alphaliner, the French research firm, revealed that Maersk has 82 ships on order, averaging about 4,800 TEUs each, we recalled Tommy Stramer citing the probability that megaships could become the industry’s “white elephants”. Maersk officials learned that lesson the hard way.