University of Gothenburg, School of Business, Economics and Law, March 1, 2013 Global Containerized Maritime Shipping: Emergence and Divergence Jean-Paul Rodrigue Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
Feb 25, 2016
University of Gothenburg, School of Business, Economics and Law, March 1, 2013
Global Containerized Maritime Shipping: Emergence and Divergence
Jean-Paul Rodrigue
Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
THE EMERGENCE OF CONTAINERIZATION
Density of Ship Log Entries, 1750-1810
Maritime Shipping Routes and Strategic Locations
The Container as a Transport, Production and Distribution Unit
TransportModes, terminals, intermodal and transmodal operations
ProductionSynchronization of inputs and
outputs (batches)
DistributionFlow management (time-based), warehousing unit
Diffusion Cycle of Containerization
New (niche) servicesProductivity gains Network development
Productivity multipliers
Massive diffusionNetwork complexities
Niche markets
Diffusion Level
TimeAdopt
ion
Accele
r
ation
Peak
Gr
owth
Maturity
Containerization as a Diffusion Cycle: World Container Traffic (1980-2011) and Scenarios to 2015
1980 1985 1990 1995 2000 2005 2010 20150
100
200
300
400
500
600
700
800
900
1000
Milli
on T
EU Divergence
1966-1992 1992-2002 2002-2008 2008 -Reference
Depression
Adoption
Acceleration
Peak Growth
Maturity
The K-Wave of Containerization
Adoption
Acceleration
Peak Growth
Maturity
K-Wave
Phase (Wave)
Transition (A)
AB
Seasonal Cycle (B)
Time(Decades)
Traffic
Years Months
Source: Guerrero and Rodrigue (2013)
Hierarchical Cluster Analysis Parameters of Global Container Ports, 1970-2010
2
3
4
5
6
7
8
9
10
0 20 40 60 80
58.06
31.50
30.69
18.92
16.10
10.20
9.36
7.52
6.74
Dissimilarity per number of classes Dissimilarity dendrogram for 7 classes
A
B.1
C
D.1
D.2
E
B.2
Dissimilarity LevelHigh Low
First Wave
Second Wave
Third Wave
Fourth Wave
Fifth Wave
Source: Guerrero and Rodrigue (2013)
The First Wave of Containerization, 1970 – The Pioneers of the Triad
Pioneer ports setting containerized operations in the economic triad (North America, Western Europe, Australia and Japan).
Driver: Trade substitution
Source: Guerrero and Rodrigue (2013)
The Second Wave of Containerization, 1980 – Adoption in the Triad and its Periphery
Expansion of the triad and its trade partners (Caribbean, Mediterranean, Asian Tigers).
Driver: Adoption of containerization
Source: Guerrero and Rodrigue (2013)
The Third Wave of Containerization, 1990 – Global Diffusion
Large diffusion in new markets (Latin America, Middle East / South Asia, Southeast Asia).
Driver: Setting of global supply chains. Setting of transshipment hubs.
Source: Guerrero and Rodrigue (2013)
The Fourth Wave of Containerization, 2000 – Global Standard
The container as the standard transport support of the global economy.
Driver: Expansion of global supply chains. China and transshipment hubs.
Source: Guerrero and Rodrigue (2013)
The Fifth Wave of Containerization, 2010 – Peak Growth
Peak growth and the setting of niches.
Driver: Spillover effect and new transshipment hubs.
Source: Guerrero and Rodrigue (2013)
Waves of Containerization, 1970-2010
Each wave lasts 8 to 10 years.Hierarchical diffusion pattern.
Source: Guerrero and Rodrigue (2013)
DIVERGENCE: GLOBAL TERMINAL OPERATORS AND TRANSSHIPMENT HUBS
Typology of Global Port Operators
StevedoresHorizontal integration (Port operations is the core business; Investment in container terminals for expansion and diversification).Expansion through direct investment.PSA (Public), HPH (Private), HHLA (Public), Eurogate (Private), ICTSI (Private), SSA (Private).Maritime Shipping CompaniesVertical integration (Maritime shipping is the main business; Investment in container terminals as a support function).Expansion through direct investment or through parent companies.APM (Private), COSCO (Public), MSC (Private), APL (Private), Hanjin (Private), Evergreen (Private).Financial HoldingsPortfolio diversification (Financial assets management is the main business; Investment in container terminals for valuation and revenue generation).Expansion through acquisitions, mergers and reorganization of assets.DPW (Sovereign Wealth Fund), Ports America (AIG; Fund), RREEF (Deutsche Bank; Fund), Macquarie Infrastructure (Fund), Morgan Stanley Infrastructure (Fund).
Factors behind the Interest of Equity Firms in Transport Terminals
Asset (Intrinsic value) Globalization made terminal assets more valuable.Terminals occupy premium locations (waterfront) that cannot be substituted.Traffic growth linked with valuation; same amount of land generates a higher income.Terminals as fairly liquid assets (perception).Source of income (Operational value)Income (rent) linked with traffic volume.Constant revenue stream with limited, or predictable, seasonality.Traffic growth expectations result in income growth expectations.
Diversification (Risk mitigation value)Sectorial and geographical asset diversification.Terminals at different locations help mitigate risks linked with a specific regional or national market.
Top Twelve Global Container Terminal Operators by Equity-Based Throughput, 2010
PSA
Hutchison Port Holdings
DPWAPM Terminals
SPIGCOSCO
MSC
China Merchants
Ports America
Modern Ter-minals
SSA MarineEvergreen
0 10 20 30 40 50 6051.3
36.032.6
31.619.5
13.69.9
8.98.18.07.57.0
Million TEUs (2010)
Container Terminal Surface of the World's Major Port Holdings, 2010
Container Terminals of the Four Major Port Holdings, 2010
The Insertion of Intermediate Hub Terminals
85% of Transshipment Traffic 15% of Transshipment Traffic
Transshipment Volume and Incidence by Major Ports, 2007-09
Asia – Mediterranean Corridor Caribbean Transshipment Triangle
East Asia Cluster
Northern Range
Gateways and Transshipment Hubs: Different Dynamics Monthly Container Traffic (Jan 2005 =100)
CHALLENGES TO CONTAINERIZATION
An Expected Shift in Containerization Growth Factors
Derived
Economic and income growthGlobalization (outsourcing)
Fragmentation of production and consumption
Substitution
Functional and geographical
diffusionNew niches
(commodities and cold chain)Capture of bulk and break-bulk
markets
Incidental
Trade imbalances
Repositioning of empty containers
Induced
Transshipment (hub, relay and
interlining)
Evolution of Containerships
A
B
C
D
E
Early Containerships (1956-)
Panamax (1980-)
Post Panamax (1988-)
New Panamax (2014-)
Fully Cellular (1970-)
Panamax Max (1985-)
Post Panamax Plus (2000-)
Post New Panamax (2006-)
Triple E (2013-)
500 – 800 TEU
1,000 – 2,500 TEU
3,000 – 3,400 TEU
3,400 – 4,500 TEU
4,000 – 5,000 TEU
6,000 – 8,000 TEU
12,500 TEU
15,000 TEU
18,000 TEU
200x20x9
137x17x9
215x20x10
250x32x12.5
290x32x12.5
285x40x13
300x43x14.5
366x49x15.2
400x59x15.5
397x56x15.5 ; 22–10–8 (not shown)
(LOA – Beam – Draft)
10
8
23
20106
69
1759
1568
1356
13
1045
84
64
A
B
C
D
E
6 containers across4 containers high on deck
4 containers high below deck
The Largest Available Containership, 1970-2013 (in TEUs)
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Ship
Siz
e in
TEU
L “Lica” Class(3,400 TEU)
R “Regina” Class(6,000 TEU)
S “Sovereign” Class(8,000 TEU)
E “Emma” Class(12,500 TEU)
“Triple E” Class(18,000 TEU)
Potential Impacts of Larger Containerships on Maritime Transport Systems
Shipping Network•Cascading of ship assets; Less port of call options; Changes in the frequency of services; Increase in transshipment.
Port Operations•Dredging; Improved equipment; More yard storage.
Hinterland•Increased congestion; Pressure to invest in infrastructures; Modal shift; Setting of inland ports.
Fuel Consumption by Containership Size and Speed
17 18 19 20 21 22 23 24 250
50
100
150
200
250
300
350
400
4,000-5,0005,000-6,0007,000-8,0008,000-9,0009,000-10,00010,000+
Speed (Knots)
Fuel
Con
sum
ptio
n (T
ons
per d
ay)
Ship Size (TEU)
Normal
Speed
Slow Steam
ing
Extra Slow
Steaming
Source: adapted from Notteboom and Carriou (2009)
Containerized Cargo Flows along Major Trade Routes, 1995-2011 (in millions of TEUs)
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0 5 10 15 20 25 30 35 40 45 504.0
4.0
4.6
5.4
6.1
7.3
7.4
8.4
9.0
10.6
11.9
13.2
13.5
13.4
10.6
12.8
12.7
3.5
3.6
3.5
2.9
2.9
3.5
3.4
3.4
3.6
4.1
4.5
4.7
5.3
6.9
6.1
6.0
6.0
2.4
2.6
3.0
3.6
3.9
4.7
4.7
5.1
6.9
8.2
9.3
11.2
13.0
13.5
11.5
13.5
14.1
2.0
2.2
2.3
2.1
2.3
2.5
2.5
2.6
3.8
4.3
4.4
4.5
5.0
5.2
5.5
5.6
6.2
1.7
1.6
1.7
1.7
1.5
1.7
1.6
1.4
1.6
1.9
2.0
2.1
2.4
3.3
2.8
3.1
3.4
1.7
1.7
2.1
2.3
2.4
2.7
2.6
2.6
3.0
3.3
3.7
3.7
3.5
3.3
2.5
2.8
2.8
Asia-North AmericaNorth America-AsiaAsia-EuropeEurope-AsiaNorth America-EuropeEurope-North America
Average Container Usage during its Life-Span
16%
16%
6%
6%
56%
Ocean TransitTerminalInland UseRepairIdle or Empty Repositioning
Why Hinterland Transportation Matters? The Space / Cost Dichotomy of Forelands and Hinterlands
FORELAND
90%
10%
Distance
20%
80%
HINTERLAND
Costs
Port
The Inland Logistics Challenge: The “Last Mile” in Freight Distribution
CapacityFunnel
FrequencyFunnel
CapacityGap
Economies of scale
FrequencyGap
FORELAND
HINTERLAND
Main Shipping Lane
Inland Terminal
INTERMEDIATE HUB
GATEWAY
Atomization
Massification
Main Routing Alternatives between the Pacific and Atlantic
Main Routing Alternatives between East Asia and Northern Europe
Conclusion: Potential Structure of the Global Container Transport System