The bigger the better? Study points out that obsession with increasing the size of ships may be at an end!

The Financial Times newspaper published, this Wednesday, 09/03/2016, an interesting report commenting on a study that points out that the obsession with building and using increasingly larger container ships may be coming to an end.. Although its content is a little different, the report inspired me to reflect on the impressive evolution in the size of this type of vessel over the last 20 years, going from a capacity of around 8.000 TEUs to more than 19.000 TEUs, reflecting the growth of trade globally, particularly on long-distance routes from Asia.

The consolidation of China and other East Asian countries as major exporters of manufactured products demanded greater handling capacity of container ships and started a race to build ever larger ships with more cargo capacity. In a scenario of expanding global trade, it is natural that the focus should be on effectiveness, that is, being able to increase the “output” of the process, in this case, the capacity to transport more and more goods.

However, the decrease in exports from China and the contraction in global demand for commodities, signaling a weakening of global trade, make shipping companies start to question the efficiency of their operations with large ships, which have high operating costs and various restrictions, which limit their use to a small group of ports capable of receiving them. The new scenario forces companies to be more flexible and efficient, which may be possible with smaller ships.

This observation, that the best is not always to be the most efficient and to operate with larger ships, is valid for any type of operations and companies that are in a situation of volume constraint, forcing a reflection on whether the practices adopted during the expansion period of demand remain the most suitable for the challenges that arise at the moment.