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December 20, 2004

Homeland security : ships and planes

Oocl_shenzhen2

Every day, it seems, there's a story in the paper about yet another crippled grandmother or four-year-old child being frisked by airport security.

The stories become much more troubling when placed in the context of the country's overall approach to securing its borders.

Among the biggest holes is the enormous amount of shipping that makes it way into seaports along the coasts.

Consider the ship pictured up top: it's the OOCL Shenzhen, the world's biggest container ship.

Its cargo?

Over 8,000 20-foot-long shipping containers.

That's a lot.

Currently, 48 such ships around this size sail the seas; there are another 954 on order between now and 2008.

Among them are some which will carry over 12,000 such containers.

I saw some movie recently, a thriller, in which a shipping container was used as a kind of mobile spy base/mission control type of thing, with a false wall and all.

I find it hard to believe that security guards have the time to look carefully inside of each and every one of the containers on a ship this large once it docks and unloads.

I'll bet it's just a spot check and "sign here, please," to the captain.

So that's why I have trouble with the over-the-top stuff that goes down at airports.

Last Friday's Financial Times had an interesting story by their transport correspondent, Robert Wright, about the coming of the megaships.

It follows.

    Age Of The Mega-Ship Is Sailing Into View

    At a Vancouver container terminal, a crane as tall as a four-storey building is being cut up for scrap.

    Towering over the crane at the Centerm facility are even larger cranes, needed to handle a new generation of large container ships.These ships, which went into service this year, promise to revolutionise container trade between Asia and the US and Europe.

    They are over 300m long, more than 40m wide and can carry more than 8,000 20ft-long containers.

    The few large ports with the cargo volumes and handling capacity to accommodate such ships look set to gain still more importance compared with smaller rivals.

    Shipping lines will also have to reorganise their services to reflect the longer times larger vessels will have to spend in port.

    But shippers hope that, by spreading the costs of running a vessel over more containers, they can bring down the costs for each container carried.

    Drewry, the London-based shipping consultants, estimate that just over 110 vessels of more than 8,000 twenty-foot equivalent units (TEUs), a standard volume measure, are on order.

    Yet many in the shipping industry doubt the wisdom of introducing the new ships.

    Even larger ones, with capacities of up to 12,000 TEUs are widely expected to follow within the next few years.

    Some executives and analysts question the apparent economies of scale offered by larger vessels.

    To keep to current schedules, larger ships have to move faster to compensate for the extra time in port.

    Even with more modern, fuel-efficient engines, this is likely to mean extra spending on fuel.

    In addition, the savings depend on vessels being full.

    This may be easy to achieve this year and next, when container shipping capacity is likely to grow less rapidly than cargo volumes.

    However, this may no longer be the case in 2006, when most analysts expect ship capacity to increase faster than cargo volumes.

    Ron Widdows, chief executive of APL, a shipping line owned by Singapore's Neptune Orient Lines, says his line has resisted ordering the larger vessels because of concerns it will not be able to fill them after 2006.

    John Fossey, analyst at Drewry Shipping, argues that the new vessels pose commercial risks because they need such large cargo flows to operate and cannot use the Panama canal.

    "With the really big ships, there are really only two trades that can support those vessels in terms of cargo volume," he says.

    "Those are the transpacific trades and Europe-Far East and Far East-Europe. If there's a downturn in the market, there are really not many other routes that these vessels could be deployed on."

    There are also concerns that deliveries from a single large ship could prove far harder to forward than similar amounts of goods delivered by two different ships.

    Back in Vancouver, even as port authorities prepare to welcome bigger ships, there are concerns about whether over-stretched rail lines to eastern Canada would be able to handle the large single loads of containers involved.

    "We don't want these ships in Vancouver," says Dave Bedwell, executive vice-president of the Canadian subsidiary of China Ocean Shipping, a major container line.

    "They're too big for us."

    Yet most large shipping lines remain convinced that bigger vessels will boost their profitability.

    Philip Green, chief executive of P&O Nedlloyd, the world's fourth-largest container line, says the line is using the ships because they will cost less per container carried.

    It took delivery of its first vessel of more than 8,000 TEU capacity this week.

    Some ports also look forward to the new ships.

    John Meredith, group managing director of Hong Kong-based Hutchison Port Holdings, the world's largest container terminal operator, says container-handling equipment can be more efficiently deployed on one large vessel at high-capacity ports such as his own.

    For many in container shipping, however, the most compelling logic may be an inexorable trend, ever since the first container ship sailed in 1956, towards bigger and more efficient ships.

    For the moment, it is a trend they are loath to reverse.

December 20, 2004 at 02:01 PM | Permalink


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Comments

They don't have time to look, Kerry kept harping about this throughout the campaign. Then again, most containers are sealed when they leave the factory with a tamper proof lock, so the issue is more do you trust the sender than did some third party slip in.

Clearly Kerry did a lousy job of getting this into public attention.

Posted by: Ennis | Dec 21, 2004 10:02:51 AM

"I saw some movie recently, a thriller, in which a shipping container was used as a kind of mobile spy base/mission control type of thing, with a false wall and all."

Was it SPARTAN? That was a heck of a movie--straight-ahead spy-thriller with great symmetry.

Posted by: tom | Dec 20, 2004 4:06:12 PM

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