Almost every global supply chain has been affected during the Covid-19 pandemic with high demand for some products, delays caused by both truck and longshore labor shortages, and equipment shortages due to blank sailings last spring resulting in the bullwhip effect throughout the supply chain.
Add to these challenges, the recent unprecedented losses of containers overboard, the inability to relocate equipment where it is needed, and aging infrastructure in areas around ports, and you get what could be referred to as the “perfect storm” within the supply chain.
These issues should have the maritime industry, and their insurers, rethinking the concept of the traditional container ship, especially the mega-container ship.
There are certainly cost benefits when the ultra-large mega-container ships are meeting demand and taking advantage of economies of scale however; the inefficiencies caused by the limited ports where they can safely call, and the increasing cargo losses at sea, which will likely take an economic toll, will be difficult to ignore.
These ships have the same constraints and issues as the mega-tankers (ULCCs) which transported huge amounts of crude oil to refineries during the 1970s. The ULCCs were too large to transit the Panama Canal, were limited in the ports where they could load and discharge (due to draft and channel depths around the world), and sometimes faced cargo shut-downs due to a lack of available tankage for discharge, or cargo shortages at load ports.
Mega-container ships have the additional issues of stability problems from mis-declared container weights and most recently, huge losses of deck containers overboard. In spite of the advantages of moving a large amount of cargo on a single vessel, the negatives have outweighed the positives for the ULCCs, leaving only a few of these vessels remaining in the world with only two currently transporting oil.
In order to accommodate these mega-container ships, some major ports and terminals around the world have been able to invest in dredging of channels and berths. These ports and terminals have also purchased and installed cranes having the necessary boom reach to load and discharge the furthest outboard containers in the deepest cargo holds. When these mega-ships call at a terminal, they are offloading up to 21,000 TEUs onto a single terminal in a relatively short period of time which then need to go onto rail or on-road trucks for transport out of the harbor area. Most of these ports are located in industrial areas or close to city centers which result in delays due to overburdened roadways and rail systems already filled with local traffic and last-mile deliveries.
During a recent interview, Gerald Fisher, Managing Director of SeaHorse Shipping Ltd., showed how his SeaHorse Shipping System is able to solve many of the challenges the supply chain is currently facing. Although this design brings back visions of Jerome Goldman’s LASH (Lighter Aboard Ship) vessels, SeaHorse differs from the LASH ships in many ways.
First, as planned, SeaHorse ships are designed to utilize ballast equipment and barge-type float-on/float-off modules each capable of carrying approximately 2250 TEUs while only drawing about 23 feet, instead of the lighters and cranes onboard the LASH ships. The same modular vessels can also carry 21,000 tons of bulk or project cargo, 5000 cars or a mixed configuration of cargo. Using a “mother ship” concept, SeaHorse checks all of the boxes required for the liner trade as well as possessing both the flexibility and commercial function of the Merchant Marine Ready Reserve/U.S. military interface.
Moving cargo by sea, rather than trucks, can reduce the strain on highways and improve air quality along some of the long to medium-haul trucking routes. Instead of a trucker carrying one container from the ports of San Pedro Bay up the coast, modules could be delivered to Port Hueneme with containers bound for Ventura, Santa Barbara, and San Luis Obispo counties, and distribution centers located north of Los Angeles. This would alleviate some of the traffic issues within the Los Angeles Basin and reduce pollution, truck idling times, and truck turn-around times. The modules can be built as either power-driven vessels (utilizing clean fuel technologies) or as “dumb barges” which can be made up to tugs and towed into port.
Tugs and barges appear to be a good option for coastwise trade, except for their slow speed and difficulty making headway in high seas. The SeaHorse design is stable enough for both trans-Pacific or trans-Atlantic trade and the entire system can be scaled up or down, giving shipowners the opportunity to tailor a ship for their trade route, while still allowing versatility as demand and freight rates fluctuate.
The cargo carried within the modules can be loaded and discharged at most existing terminals, without requiring updated container cranes. All six modules can discharge and backload at different terminals within a single port, or port complex, or if the modules are self-propelled, they can sail, unassisted, to multiple ports along a coastline for simultaneous discharge and backload. If the modules are built in the U.S., under the Jones Act, this would allow even more flexibility for U.S. marine highways. If used for short-sea shipping, SeaHorse would eliminate terminal to terminal drayage within a port and allow the use of less impacted ports, located closer to customers and exporters, to move cargo faster and more efficiently.
By calling at under-utilized ports, SeaHorse would also allow cargo to bypass the traditional chokepoints in the supply chain. A SeaHorse vessel built for the U.S. West Coast trade could “lighter” modules off San Francisco Bay with cargo bound for the ports of Oakland, Stockton, Redwood City and even Vallejo. The modules could also call at ports along the Columbia River such as Astoria, Portland, Longview, and Vancouver, bringing vessels closer to agricultural exporters. This same model could be used on the East Coast of the U. S. and at shallow water ports around the world.
Mr. Fisher points out that one of the many advantages of SeaHorse over standard container or break-bulk ships is their ability to drop off import modules and pick up modules which are already backloaded with containers of export cargo (or empties) all within the same ballasting operation. This could have the export cargo outbound within 24 hours of reaching port.
Mr. Fisher holds plans for the SeaHorse system and in 2014 he was in discussions with Avondale Shipyard to build the first of the SeaHorse vessels. Subsequently, Northrup Grumman closed Avondale, with the loss of 16,000 jobs in the New Orleans area.
A creative solution is desperately needed to solve the current supply chain issues and the megaships are showing that they are not the answer. The SeaHorse system is an imaginative approach to ship design which is flexible, transfers well to military use during times of global conflict, and has the ability to circumvent chokepoints in the supply chain.
Although SeaHorse would require a significant capital investment, and would not be able to utilize the economies of scale of the mega-container ships, the rewards would be realized relatively quickly in the flexibility of port usage, agility of the supply chain, significant reduction or elimination of container loss and damage at sea, as well as the reduction of port congestion and improved air quality.
Captain Laura Kovary holds an Unlimited Tonnage Master’s License (continuity) and sailed onboard tankers, freighters, container, and passenger ships. She is currently an Instructor of Supply Chain Management at CSU Long Beach College of Business, UCLA Extension, CSULB’s Center for International Trade and Transportation, and the Maritime & Environmental Training Trust. Her company, Environmental Maritime Services, provides training and consulting on environmental, safety, compliance, port security, and auditing services including ISO and TMSA audits www.envmaritime.com
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