Mega ships : a study of its impacts and effectiveness (part 1 : carrier's perspective)

The global financial crisis in 2008 has caused a prolonged impact on container seaborne transportation. For many years, liner carriers experience low freight rates due to an overcapacity in tonnage supplies. Moreover, international regulatory authorities have put in place strict regulatory requirement, such as Ballast Water Management Convention & IMO 2020 Global Sulphur limit, which ocean carriers must adhere to. Despite these challenges, carriers continue to place new order and take delivery of Ultra-Large container ships (ULCSs) as they seek to achieve Economies of Scales (EOS) through enormous ship sizes. The current largest containership ship is “HMM Algeciras” with a capacity close to 23,964 TEUs. The purpose of this paper is to provide maritime stakeholders, specifically in liner sector, a structured and comprehensive understanding on the impacts brought about by mega ships and carrier’s effectiveness in managing mega ships. Ideally, these stakeholders may tap on the results to make strategic decisions revolving seaborn container transportation. A three-part work packages were initiated to investigate the impacts and effectiveness of mega ships with relevance to (1) carriers, (2) ship building and (3) port operators. In addition, the degree of these impacts and their effectiveness will then evaluate the viability of introducing 30,000 TEUs Hyper-Large container vessel by 2025. Each work packages will contain 3 sub-objectives, covering strategy, sustainability and implementation, to help build-up the relevant analysis required to achieve the main objective of this area of research. This research paper uses a multimethodology approach to analyse carrier’s competitive position, macro-environment and projection of economic outlook. A thorough analysis of present’s economy, mega ships, carriers and ports were then conducted and verified with literatures. Adding on, qualitative analysis, such as SWOT & PESTLE analysis, were then performed to examine questionnaire responses and interviewees’ comments, along with reliable secondary sources, to derive and explain findings. The key takeaway of this paper is the lack of commercial viability to proceed to order 30,000 TEUs Hyper-Large container vessels (HLCSs). This was supported by strong unfavourable economical impacts arising from black swan event that render carriers to experience blank services with poor trade demand. Even though carriers are highly effective in transferring increased bunker cost to shippers, however, stretched financial position along with ii glooming economy threats and future regulatory requirement had indicate poor earnings for carriers and sustainability of cost-leadership strategy seems unfavourable. A large part of findings was presented in qualitative manner due to insufficient statistical background to develop a forecasting mathematical model. The use of reliable sources helps overcome this technical limitation. Reading of all three work packages will provide readers a more holistic possibilities on the Hyper-Large Container Ships.Bachelor of Science (Maritime Studies