Page 7 - Port Of Hamburg Magazine 01.2018

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50 YEARS OF CONTAINERS IN HAMBURG ■
where the top 4 players operate more than half of the total global capacity. In addition, all the global players have grouped themselves into three global alliances that more or less act as an oligopoly on the major East-West trades. This is linked to ship size: consolidation and alliances allow firms to order and to fill bigger ships.
STRETCHED TO ITS LIMITS, RIPE FOR INNOVATION?
The container shipping industry is trapped in a “vicious circle” from which it seems impossible to escape. This is how the vicious circle works. A shipping firm can make money by being cheaper than his competitors. This can be realised by bigger ships. As soon as one firm orders bigger ships, the others follow so that they do not lose in competitiveness. The result is a massive order of bigger ships, which leads to overcapacity: too many ships for the demand (the goods that need to be transported). This overcapacity leads to lower freight rates, so less revenues for shipping firms, leading to losses and the need for new measures to restore prof-
itability. Hence, the need for cost savings via even big- ger ships, which triggers a whole new round of the ef- fects just described.
The current business model has reached its limits. The sector is ripe for disruption: more efficiency in the mari- time supply chains needs new innovations. What might these be? In my view, these could centre around new modularity, digitalisation and new business models.
CONTAINER: STILL THE RELEVANT UNIT?
While container ships simplified cargo handling in the 1960s, very large container ships have tended to com- plicate operations, as they result in thousands (and sometimes more than ten thousand) containers per ship to be handled at once in a terminal. In order to do this quickly, terminals need up to ten of the largest con- tainer cranes working at full speed, cranes they will not need most of the rest of the week. Moreover, the sud- den arrival or departure of so many containers put se- vere constraints on the container yard, as these will need to be connected to a train, truck or barge. Larger
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