The new mantra is ‘anything that can carry containers’. Concordia owns 6 tankers they would like to convert to container ships. Recently it’s been bulk ships of other sorts that have been converted.
Back in the 60s, Malcolm McLean, the founder of container shipping, did just that for his first container ships! I didn’t know that!
Read on to see some of the details of the conversion.
Sam Chambers February 8, 2022
Concordia Maritime looks at converting tankers to boxships – Splash247
Ocean carriers are running a business in which their reliability of completing voyages planned in advance ranges around 30% to 40%. The highest reported here, by Sea-Intelligence Maritime Analysis, is Maersk at 46%. How can you run a business with these kinds of service levels?
The answer seems to be, VERY profitably. Most ocean carriers reported billions in net income.
I like this graph from the article.
While the trend down coincides with COVID, service levels were not great even before 2019. It’s due to the canceled sailings and skipped stops that are commonplace today. Port congestion has not helped.
But we can see a significant number of firms changing their level of dependency on the scheduled services offered by the major ocean carriers and the alliances,. Large shippers are buying their own ships and containers, usually of smaller size, and choosing when their shipments are scheduled, where they go, and how they get to their warehouses. Even some forwarders and brokers have started doing this. Other firms are looking for brokers who can help them find ways to get their cargo on time.
I think the large carriers have to start looking at how to improve service levels. If it means smaller ships and frequent sailings that don’t get canceled, that’s what it will take.
Perhaps we need feeder ships to allow the ocean carriers to consolidate multiple loads onto their giant ships for long voyages, but offload them near the destination. Years ago Al Baird, an English maritime economist, wrote about offshore container terminals, that could be used with short-range feeders to relieve the wharf pressure on our landside container terminals of today.
New thinking is needed to improve carrier on-time reliability. It won’t come without effort and money. But we can’t keep relying on ‘someone else’ to brainstorm solutions and give them a try. Especially when we’re earning billions.
8 February 2022 Jack Donnelly Ports and Terminals, Shipping Lines
2021 vessel reliability recorded at its lowest ever – Port Technology International
Tagged container shipping, disruption, Logistics, reliability, service, Shipping
Demurrage and Detention are on everyone’s minds in ocean logistics today. The FMC proposes to regularize the information and timing of billing practices.
This could be very helpful in reducing the chaos of D&D billing today. It’s impossible to tell exactly which incidents happened when, and even who should pay. Those kinds of questions must have evidence to settle them, and it’s not being provided in bills. That results in long conversations and debates over the bills. It’s a huge time-waster, and fertile ground for complaints, refusals to pay, and legal action. These add cost while reducing consumer value.
In any principal-agent situation, when the cost of monitoring rises too much, the overall deal can’t be made. D&D charges are part of the cost of monitoring ocean trade. And in principal-agent models, monitoring costs often take the form of data collection and verification.
For years, ocean container traffic flowed fairly smoothly, and the events that triggered D&D charges did not happen very often. In those days, perhaps we could get away with settling claims by email and phone discussion. But with massive congestion worldwide, and only weak motivation to pick up empty containers, those days have changed.
We need accurate information for the parties to be able to resolve the D&D charges, and get the right bills paid by the right party. The FMC has it about right to take this first step, to regularize the bills.
Once that happens, if the D&D problem continues to be big, firms will recognize the value of investing in correct data gathering, and sharing it, and establishing standards for handling it.
John Gallagher, Washington Correspondent Monday, February 7, 2022
FMC to consider regulating ocean carrier billing practices – FreightWaves
Supply Chain Digest Port Technology International Marine Link
Supply Chain and Logistics 