Because part of Enterra Solutions’ business involves port and harbor operations and security and because shipping is an integral part of the supply chain, I watch what is going on in the shipping industry. Last year, as the global recession started to wane, I noted that the shipping industry, which had been hard hit during the recession, was starting to recover. The news has been especially bright for lines specializing in container shipping. At least one shipping line, Maersk, believes the future looks bright. It has ordered ten of the world’s largest ships to be built with the first one expected to be delivered in 2013 [“The Triple-E Maersk container ship will be the world’s largest ship and the most efficient,” by Jack Martin, Gizmag, 21 February 2011]. Martin reports:
“Korea’s Daewoo is to build the world’s largest ship for Mærsk line. The US$190 million, 400 metre ‘Triple-E’ class bohemoths will carry 18,000 TEU containers, 2500 more than the current largest, Emma Mærsk. Superior economies of scale will enable the new monsters to surpass the industry record for both fuel efficiency and (20% better) CO2 emissions per container moved. In a move set to impact global shipping transport costs and efficiencies, ten Triple-E ships will go into service between 2013 and 2015 with a further 20 ships optioned. If the same number of containers were loaded on a train, it would be 110 km long. If they were stacked on top of one another, they’d reach beyond the stratosphere (47 km).”
Admit it — you’re impressed. That is one big ship. The Financial Times published a terrific video about the Triple-E. It takes about 4 minutes to watch. Maersk is apparently not alone in its desire to have bigger ships. “These days, Choe Yong Seok of Daewoo Shipbuilding & Marine Engineering in Seoul has been getting calls and e-mails from clients asking whether the company can build ships that can carry 20,000 20-foot containers, more than double the capacity of today’s most common vessels.” [“A Trade Rebound Launches Bigger Boats,” by Kyhunghee Park, Bloomberg BusinessWeek, 9 December 2010]. Bigger ships mean better efficiency — if they can be filled to capacity — and companies believe big ships are more environmentally friendly. Many analysts believe that more and more companies are going to try and reduce their carbon footprint for both PR and profitability reasons. Maersk must certainly believe that to be true since it is advertising the carbon reducing features of its new class of ship. As Martin puts it, “The vessel’s enormous capacity will enable Maersk Line to move the greatest number of containers possible for its customers in the most energy efficient way and with the smallest CO2 footprint.”
Martin reports that “the Triple-E isn’t just the largest vessel of any kind in operation today: it is actually the longest and widest container vessel possible based on port restrictions.” Although the Triple-E will be able to carry 16 percent more TEUs than the Emma Mærsk (the company’s E-class ship), it will only be four meters longer and three meters wider than that ship. Martin continues:
“The Triple-E’s enormity is actually in its bulk. Through feats of engineering, the Triple-E’s vastly expanded inside cavity gives it a capacity 16 percent greater than Emma (equivalent to 2,500 containers), despite relatively little change in the length and width. Unlike Emma Mærsk’s more typical V-shaped hull which limits container capacity towards the bottom of the ‘V’ in the cargo holds, the hull of the Triple-E is more like a U-shape. An additional row of containers was added to the Triple-E as well, giving it 23 rows across its width, compared to Emma’s 22. The more spacious hull and extra row provides additional capacity for 1,500 containers. Additional container space has been created in the vessel by moving the navigation bridge and accommodation 5 bays forward and the engine room and chimney 6 bays back in what is called a ‘two-island’ design. With the more forward navigation bridge, containers can be stacked higher in front of the bridge (approximately 250 more) without losing visibility. And approximately 750 more containers fill the space behind the bridge above deck and below deck using the space created by the engine room’s position further to the back of the vessel.”
As noted above, with a length of over four football fields (400 meters), Triple-E ships will be the longest vessels plying the seas. For purposes of comparison, Martin notes that the Emma Mærsk class vessels are 396 meters long, the super tanker Berge Emperor is 380 meters long, the cruise ship Allure of the Seas is 361 meters long, and the carrier USS Enterprise is 341 meters long. He reports that “the largest ship ever built was the super tanker Knock Nevis which was 458 meters long but is no longer in service and is being scrapped.” Whereas the USS Enterprise operates with a nominal crew of 3200 (plus an additional 2480 personnel when the air wing is aboard), Triple-E ships can only accommodate 34 persons and will be operated with a standard crew of a crew of 19 seafarers (although it can be operated with as few as 13 people).
Triple-E ships will be capable of traveling at 23-knots, but they will be purpose-built to travel more slowly. As the graphic below indicates, the ships will be able to reduce their CO2 emissions significantly by traveling 8 knots slower than their top speed. Traveling at reduced speeds has been a standard industry practice since the price of a barrel of oil shot up several years ago. With oil prices currently predicted to stabilize around $100/barrel, the practice of slow steaming probably won’t change in the future. When it comes to maritime shipping, Elisabeth Rosenthal insists, “Slow is better.” [“Slow Trip Across Sea Aids Profit and Environment,” New York Times, 16 February 2010]. She writes:
“By halving its top cruising speed over the last two years, Maersk cut fuel consumption on major routes by as much as 30 percent, greatly reducing costs. But the company also achieved an equal cut in the ships’ emissions of greenhouse gases. ‘The previous focus has been on “What will it cost?” and “Get it to me as fast as possible,”‘ said Soren Stig Nielsen, Maersk’s director of environmental sustainability, who noted that the practice began in 2008, when oil prices jumped to $145 a barrel. ‘But now there is a third dimension,’ he said. ‘What’s the CO2 footprint?’ Traveling more slowly, he added, is ‘a great opportunity’ to lower emissions ‘without a quantum leap in innovation.'”
Not everyone is totally pleased with slow steaming strategies, “Federal Maritime Commission Chairman Richard A. Lidinsky Jr. says … that the agency should assess the economic effects of slow-steaming to ensure the practice is not causing ‘unreasonable constraints’ on the international supply chain.” [“FMC wants to look at Impact of Slow Steaming on the Supply Chain, as for More Disclosure from Carrier Alliance Meetings,” Supply Chain Digest, 13 January 2011] Lidinsky’s concerns seem to focus on “‘extra slow steaming,’ in which speeds are cut to 12-16 knots, which research company Alphaliner estimates is used on half the Pacific to West Coast routes and an astounding 9% of Asia to Europe lanes.” The article concludes:
“While the practice does reduce CO2 emissions and other pollutants, the real driver of the approach was the collapse in ocean shipping rates and much excess capacity in the industry. Slow steaming allowed carriers to save significantly on expensive bunker fuel consumption (by as much as 60%), and the longer voyages due to the slower speeds had the effect of reducing industry capacity. In the terrible economic climate, shippers and importers were willing to incur longer shipping cycles and more inventory risk to reduce logistics costs. … [The Transpacific Stabilization Agreement (TSA), a consortium of carriers serving the Asia to US market,] now wants to an OK from the FMC to look at increased use of alternative fuels, ‘cold-ironing’ (powering a ship from shore when it is at berth in port), and the use of other technologies to reduce air emissions. ‘While these practices hold promise for reducing vessels’ emissions, the Commission will closely monitor slow-steaming arrangements to ensure that they do not cause unreasonable constraints now that international shipping demand has recovered,’ Lidinsky said.”
Although shipping lines are primarily concerned about costs, they are increasingly combining cost and carbon emission reduction efforts. For example, the Transpacific Stabilization Agreement consortium was given permission by the Federal Maritime Commission to talk collectively about slow steaming practices under the guise of environmentalism. There is good reason for the industry to concern itself about carbon emissions, “The industry accounts for some 3 per cent of world carbon dioxide emissions – about the same as aviation – and it has come under considerable pressure to reduce them.” [“All energy savings on deck,” by Robert Wright, Financial Times, 24 November 2009]. Wright reports:
“The industry is convinced that modern, efficient ships have a role to play in cutting carbon dioxide emissions for each tonne of goods moved. The International Chamber of Shipping, a confederation of shipowners’ organisations, says the sector has cut emissions per tonne shipped by about a quarter since the 1970s. That could be cut by a further 15 to 20 per cent over the next five to 15 years, they believe. … Overall energy saving on modern ships comes from a package of measures ranging from using more energy-efficient light bulbs to improving hull design, says [Bo Cerup-Simonsen, head of Maersk maritime technology].”
Among some of the technologies being explored include engines, alternate energy sources, propellers, paint, and air lubrication. “The marine industry is gearing up for the biggest revolution since World War II,” says Lee Sokje, an analyst at Mirae Asset Securities in Seoul. [“Big Ships Go Green,” by Kyunghee Park, Bloomberg BusinessWeek, 17 May 2010]. Park reports:
“Nippon Yusen, owner of the world’s second-largest fleet, is sinking $743 million into emissions control over five years. Among other things, the Tokyo-based company has been testing what it calls an ‘air lubrication’ system that reduces CO2 by approximately 10 percent and is considering putting it to work on new ships. … In time, Nippon Yusen hopes to combine an air lubrication system with others that harness solar and wind power to achieve carbon reductions of as much as 69 percent. … Rivals, meanwhile, are exploring other routes to fuel efficiency. China Cosco Holdings is considering bringing back nuclear-powered cargo ships, introduced in the early 1960s. ‘We’re not only looking into nuclear but also wind energy and solar energy,’ says Zhang Liang, president of China Cosco.”
I wouldn’t look for any alternative energy powered ships anytime in the near future. “Analysts warn that the cost of deploying some alternative energy technologies are prohibitive. ‘Ship prices are going to go through the roof if any of these ships using renewable energy are built,’ says Mirae’s Lee.” Since current maritime diesel engines are already pretty efficient, slow steaming strategies, improved hull designs, and drag reducing technologies are likely to provide the biggest reductions in carbon emissions. Port operators, of course, are watching this trend towards super-sizing because the Triple-E will push the limits of current super port capacity. Tomorrow, I’ll discuss the shipping industries future from the port operator rather than the shipping line perspective.