Mega container vessels present challenges for supply chains. Their large size (up to 15,000 TEU) leads to port congestion, increased transit times, and higher risks of disruption. Mega ships have also disrupted carrier markets, reducing competition as carriers overinvested to maintain market share. While sea transport costs may decrease, total supply chain costs may not due to increased handling and regional transport expenses. Supply chains need to consider adjusting networks to main ports, extending sea legs with transhipments, contracting alternative routing for risk reduction, and improving container tracking to respond to challenges from mega ships.

1. Mega Ships:
A threat to your supply chain?
1

2. Agenda
• Introduction to Participants
• Mega container vessels, history on the market
• Market developments.
• Trends which effect the supply chain.
• How to respond to these trends?
2

3. • Commercial Container transport existing almost 60 years.
• Container demand has been growing
10% year on year far above the
6% growth rate of global trade.
• Transport capacity per ship grew
from 4,000 to 15,000 TEU over a
period of only 15 years.
• The Economic crisis in 2008 disrupted
the traditional container market and forced carriers to think differently.
History
3
The
first
dedicated
vessel
capable
of
transpor7ng
600
containers
started
service
in
November
1955
between
North
Vancouver,
Bri7sh
Columbia,
and
Skagway,
Alaska.

4. Vessel Extension
4

5. Main Container Ports Before
the Mega Vessels arrived
5

6. Market Developments
over the last few years
• New vessels developed to adjust to new Service network.
• Rapid introduction of larger cost efficient vessels
• Large overcapacity on Main routes
• Reduction of ports to call
• Effects on service network
– 2de Sues channel
– New Panama Channel April 2016
– US west coast ports upgrade.
6

7. Trends which effect the
supply chain:
• Mega Ships have a negative impact on supply chain operations.
– Congestion and Trans-shipments
– Transit time increase
– Risk on disruption increases.
– Responsiveness to disruption is poor.
• Mega Ships have disrupted the supplier market.
– Carriers overinvested to maintain market position.
– Competition between carriers will be reduced.
– Joint efforts needed to reduce huge overcapacity.
• Mega Ships do not reduce the total supply chain cost.
– Cost reductions on the Sea-leg will be minimized by cost increase on
terminal handling and regional transport.
7

8. Transport Risks on Sea
8
• 10,000
containers
go
overboard
yearly.
(0.002%)
• On
average
20
cargo
vessels
are
lost
every
year.
Ø This
is
0.03%
of
a
commercial
fleet
of
85,000
vessels.
• Approximately
2,000
lives
are
lost.

9. How to respond to these
trends?
• Adjust network to main ports?
• Extend the sea transport leg with additional transshipments?
• Risk reduction with alternative routing contracted?
• Safety Stock adjustments?
• Container tracking and tracing?
9

10. Carrier alliances
10

11. Closing
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