ignite 2015 eu - mega ships: a threat to your supply chain?
TRANSCRIPT
Mega Ships: A threat to your supply chain?
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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?
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• 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
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The first dedicated vessel capable of transpor7ng 600 containers started service in November 1955 between North Vancouver, Bri7sh Columbia, and Skagway, Alaska.
Vessel Extension
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Main Container Ports Before the Mega Vessels arrived
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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.
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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.
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Transport Risks on Sea
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• 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.
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?
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Carrier alliances
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Closing
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