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Should the industry go back to basics – smaller vessels?

Big vessels were built because smaller ones have limited cargo capacities

The first cargo ship was designed in 1766. “Starvationer” had a 10 wooden container capacity to transport coal from Worsley Delph to Manchester via the Bridgewater Canal. It was known for navigating subterranean canals in the north of England. Things changed when trade expanded.

The conundrum about big ships
Cargo vessels gradually got bigger with increased capacities. In 2017, Japanese carrier Mitsui OSK Lines took their 20,000 TEU cargo ship to sea. The MOL Triumph is said to be the world’s first 20,000 TEU cargo vessel. Notably, big vessels were also designed with economies of scale in mind; the lowest possible fuel consumption and crew costs. This enabled lower freight prices for customers and ultimately, the end consumers. Apart from occasional incidents, things went fairly well.

Bottlenecks became a hot topic since April this year, beginning with the Suez Canal fiasco. Cargo ships forced to divert to other locations incurred extra out of pocket costs. It hence started a chain reaction where ports in the United States and Europe started to experience congestions. They stretched ports way beyond their limits and did not show any signs of slowing down. Subsequently, the unkind weather put China’s ports to the test. Typhoons and outbreaks caused temporal shutdowns. Regardless of duration, it still equated to delays by days.

Re-evaluate your strategies
The industry is now shrouded with intense pessimism and furious lashings over high shipping rates. Business practices, ethical or otherwise have gone both extremes that some received authorities’ attention, others took this as an opportunity to re-evaluate their business models and strategies.

Recent Baltic Freight Indices showed an interest in smaller vessels. There is a trade-off looking at it from various perspectives. Smaller vessels may mean more chartering orders, but they meet deadlines and bring revenue. Nevertheless, these smaller vessels have the bandwidth to offer friendlier rates to cargo owners. Therefore, they (cargo owners) should not be taking on the shipowners’ existing issues of equipment shortage, and be resigned to their high rates to secure space. Marine Online has an extensive listing of available vessels for cargo owners across the globe, certainly without peculiar conditions.

 

Marine Online News Team
Please email us at marketing@marineonline.com to contact the author for this article.

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