A noted container industry analyst says ocean carriers may pay $200 per ton more to meet new low sulphur fuel standards than they pay in 2019, but the increase will only be slightly higher than the bunker heavy fuel price paid in 2014.
In an interview with AJOT at the Trans Pacific Maritime (TPM) conference in Long Beach where he is a speaker, Lars Jensen, a partner at SeaIntelligence Consulting noted:
The “security of Blockchain is overrated because while the Blockchain instrument may be secure, hackers can still hack into the accounts of ocean carriers and shippers to gain access to data that could compromise confidentiality.” Jensen added that Bitcoin owners have been hacked and had money stolen from them using Blockchain. This “should act as a warning to ocean carriers and shippers that they should not be overconfident about the security of Blockchain transactions.”
The “decision by Maersk and followed by other ocean carriers to build 18,000 teu (twenty foot unit) container ships and larger will turn out to have been a mistake… The carriers have realized a benefit in lower operating costs, but revenue projections were based on projected growth increases before the 2008 global market crash.” Since 2008, he notes: ” ocean freight growth has been slower and no longer justifies the investment.” Furthermore, the 18,000 teu ships now impose new burdens and spending by ports and terminal operators around the world to buy bigger cranes, dredge ship channels and increase terminal capacity to move more containers per vessel arrival. The result is “to increase land transportation costs and require more long distance transportation either by feeder ship or truck adding to the final cost to the shipper.” Jensen says the more realistic maximum size ship would have been for carriers to build more 14,000 teu ships. He says 150 of these 18,000 teu container ships, and sometimes larger, have been built by the carriers and sooner or later more ports will need to make the investment to accommodate them or lose business to the ports that do make the investment. One example is the Port of Long Beach which will have spent over $1 billion building the automated Long Beach Container Terminal that can accommodate 18,000 teu ships.
China Ocean Shipping Corporation’s (COSCO) growing dominance over the ocean shipping market is based on Chinese government spending mirrored in China’s Belt and Road initiatives. These initiatives involve Chinese government financing of road, rail and port installations to extend Chinese influence into Asia, Africa and Europe and facilitate the import and export of goods and raw materials. COSCO recently acquired Hong Kong-based OOCL, which gives it an ownership stake in the automated Long Beach Container Terminal. While other European and Asian countries also support their ocean carriers, the support accorded by the Chinese government to COSCO is exceptional.
Jensen is a former analyst with Maersk Line, who lives in Copenhagen, Denmark.
