Megaships may be approaching their maximum size

By Bill Holloway

The largest container ship ever to call at a North American port, the CMA CGM Benjamin Franklin, visited the ports of Long Beach, Los Angeles, and Seattle last month. At 1306 feet long, 177 feet wide, and 197 feet tall, the ship is among the largest in the world and can carry 18,000 TEU (twenty-foot equivalent units), the standard measurement of container ship capacity. This represents a major increase from the largest ships just a few decades ago. According to the Journal of Commerce, the size of the world’s largest container vessels has increased more than sixfold since 1975 and is expected to grow an additional 13 percent by 2020.

While these larger ships can be operated by small crews and use less fuel per container than smaller ships, there are a number of costs that come with these larger vessels, including increased risk, port infrastructure costs, and congestion. As noted recently by Capt. George H. Livingstone, risks associated with these ships are higher because ocean carriers are, in effect, putting all of their eggs in one basket, and insurers are concerned about the potential for catastrophic losses. In addition, with the arrival of ever larger ships on primary routes, ships that used to handle the primary routes are being moved onto feeder routes serving smaller ports designed for smaller ships, in turn making entry into these smaller ports difficult as well.

The cost to accommodate these ships in ports can be enormous too. Their size requires many ports to increase the height of the cranes they use for unloading, raise bridges to allow ships to pass underneath, and dredge their waterways. According to a recent article in USA Today, the Port of Long Beach has spent $1 billion dredging and raising bridges, and will have to raise its cranes as well in order to handle fully loaded megaships.

Finally, these giant ships take more time to unload and strain the highway and rail transportation networks that carry cargo once it is offloaded. As Olaf Merk, of the OECD International Transport Forum, notes, there is a point where the cost savings from larger ships no longer justify the increased on-land transport costs, and increasing the size of container ships beyond current levels could result in higher overall transport costs. He recommends reevaluating public policies that could be incentivizing the use of megaships beyond what is beneficial to the public.

With ship sizes continuing to grow, ports and transportation agencies should take a close look at their policies regarding megaships and evaluate whether the incentives toward increasing ship sizes are aligned with the public good.

Bill Holloway is a Transportation Policy Analyst at SSTI.