Down Memory Lane … A reprint of Vol. VI, Art. 20 – Eight years ago today (February 15, 2006)

“The last thing you want is for the port to act as a bottleneck. Instead, ports must facilitate the rapid throughput of cargo … Many ports are now focused on megaships, but you can’t handle all of the growing traffic in big TEU vessels. Much of the movement toward larger ships and the ports’ competition for that traffic involves ego and the corporate fanning of feathers …

“There is a significant impact on the transportation infrastructure when ships with 6,000-plus TEUs call at a port. It places a great deal of pressure on the terminal, as well as the connecting highways and rails. It creates a peaking pressure, or spikes, in container throughput. Economically, megaships will best be served by limiting the number of ports at which they call. You lose the economies of scale when the load factors are not there.” – Commander Jon S. Helmick (1997)

“It’s a good news/bad news story … The ideal is to bring the containers off the ships and put them on rail. But the question is, what happens when vessels get too large? We have seen the same thing in other modes – whether in the length of trucks, railcars, flatcars, containers or planes. There comes a point when large vessels create problems. We may be at that point now with ocean vessels.

“Larger ships mean fewer ports of call, which means shippers have to transport containers over a longer distance to get to a port. There is also the question of putting all of our eggs in one basket from a risk standpoint. What if the ship breaks down? … Eventually, bigger ships may end up losing business to smaller ships.” – Don Cameron (1997)

“Megaships are not going to be entering the Gulf of Mexico and won’t be coming to the Port of New Orleans. They will be very expensive to operate and will be required to move a lot of cargo. Now more than ever it will not be economical to bring them into the Gulf. – Jim Reese (1997)

“Megaships strain the capacity of inland infrastructure, terminal operators and rail and truck carriers. As terminals run out of space, ports will be required to seek alternate ways of expanding their operations. The most logical and least costly way to expand without straining the capacity of inland infrastructures, terminal operators and rail and truck carriers is to establish smaller container ports closer to end users.” – Nolan Gimpel (2003)

“Operational and commercial limitations … reduce the effectiveness of megaships … Carriers will have a more difficult time filling these large vessels, thereby cancelling out the economies of scale these ships are supposed to produce … A limited number of ports are able to service these larger vessels because of harbor depths … These vessels are unable to accommodate importers and exporters who prefer more direct, less costly service. The bigger the ship, the more transshipment and feedering you need, and that costs money.”
– Neil Davidson (2004)

[Jean Godwin said it best of all. “It’s like trying to fit a 16-inch pipe into a 4-inch opening.”]