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In Search of the Link between Ship Size and Operations

Author

Listed:
  • Christa Sys
  • Gust Blauwens
  • Eddy Omey
  • Eddy Van De Voorde
  • Frank Witlox

Abstract

Since 1990s the liner shipping industry has faced a period of restructuring and consolidation, and been confronted with a continuing increase in container vessel scale. The impact of these changes is noticeable in trade patterns, cargo handling methods and shipping routes, in short ‘operations’. After listing factors influencing size, growth in container ship size is explained by economies of scale in deploying larger vessels. In order to quantify economies of scale, this paper uses the liner service cash flow model. A novelty in the model is the inclusion of +6000-20-foot Equivalent Unit (TEU) vessels and the distinction in costs between single and twin propeller units on ships. The results illustrate that scale economies have been -- and will continue to be -- the driving force behind the deployment of larger container vessels. The paper then assesses the link between ship size and operations, given current discussions about the increase in container vessel scale. It is found that (a) ship size and operations are linked; (b) optimal ship size depends on transport segment (deep-sea vs. short-sea shipping, SSS), terminal type (transhipment terminals vs. other terminals), trade lane (East-West vs. North-South trades) and technology; and (c) a ship optimal for one trade can be suboptimal for another.

Suggested Citation

  • Christa Sys & Gust Blauwens & Eddy Omey & Eddy Van De Voorde & Frank Witlox, 2008. "In Search of the Link between Ship Size and Operations," Transportation Planning and Technology, Taylor & Francis Journals, vol. 31(4), pages 435-463, June.
    • Handle: RePEc:taf:transp:v:31:y:2008:i:4:p:435-463
    DOI: 10.1080/03081060802335109
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
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    Cited by:

    1. Enrico Musso & Anna Sciomachen, 0. "Impact of megaships on the performance of port container terminals," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 0, pages 1-14.
    2. Enrico Musso & Anna Sciomachen, 2020. "Impact of megaships on the performance of port container terminals," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(3), pages 432-445, September.
    3. Katrien Storms & Christa Sys & Thierry Vanelslander & Ruben Deuren, 2023. "Demurrage and detention: from operational challenges towards solutions," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-31, December.
    4. Lucija Bukvić & Jasmina Pašagić Škrinjar & Borna Abramović & Vladislav Zitrický, 2021. "Route Selection Decision-Making in an Intermodal Transport Network Using Game Theory," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    5. Gadhia, Hitesh K. & Kotzab, Herbert & Prockl, Günter, 2011. "Levels of internationalization in the container shipping industry: an assessment of the port networks of the large container shipping companies," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1431-1442.
    6. Milan Janić, 2018. "Multidimensional examination of the performances of a liner shipping network: trunk line/route operated by conventional (Panamax Max) and mega (ULC - ultra large container) ships," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-35, December.
    7. Fan, Lixian & Li, Ziyan & Xie, Jiaqi & Yin, Jingbo, 2023. "Container ship investment Decisions―Newbuilding vs second-hand vessels," Transport Policy, Elsevier, vol. 143(C), pages 1-9.
    8. Shmuel Yahalom & Changqian Guan, 2018. "Containership port time: The bay time factor," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(2), pages 211-227, June.
    9. Jiawei Ge & Mo Zhu & Mei Sha & Theo Notteboom & Wenming Shi & Xuefeng Wang, 2021. "Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 587-614, December.
    10. Tran, Nguyen Khoi & Haasis, Hans-Dietrich, 2015. "An empirical study of fleet expansion and growth of ship size in container liner shipping," International Journal of Production Economics, Elsevier, vol. 159(C), pages 241-253.
    11. Dariusz Bernacki, 2021. "Assessing the Link between Vessel Size and Maritime Supply Chain Sustainable Performance," Energies, MDPI, vol. 14(11), pages 1-21, May.
    12. Monica Grosso & Ana-Rita Lynce & Anne Silla & Georgios Vaggelas, 2010. "Short Sea Shipping, intermodality and parameters influencing pricing policies: the Mediterranean case," Netnomics, Springer, vol. 11(1), pages 47-67, April.
    13. Nestor Goicoechea & Luis María Abadie, 2021. "Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System," Energies, MDPI, vol. 14(22), pages 1-25, November.
    14. Wu, Wei-Ming, 2020. "The optimal speed in container shipping: Theory and empirical evidence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    15. Carlo Altomonte & Laura Bonacorsi & Italo Colantobe, 2018. "Trade and Growth in the Age of Global Value Chains," BAFFI CAREFIN Working Papers 1897, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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