Has the Industry Made a Mega-Ship Error?

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George Youroukos, CEO of Athens-based containership owner Poseidon Containers has said cost savings are not being offered by the mega-ships that are being ordered and deployed and that economies of scale are not being realised, according to the Journal of Commerce.

George Youroukos said: “For the last four years, the orderbook has been filled with large ship orders, and what we need is for those companies to stop ordering.

“What they realize is that these large ships don’t offer the economies of scale they were hoping for, especially with the price of oil going down and the market going down.”

Mr Youroukos continued by saying “everybody had to make the same mistake and follow or abandon the trade”, in response to Maersk’s large Triple-E order in 2011.

Mr Youroukos’ statement is in line with recent Drewry findings, which found that economies of scale may be running out, unless collaboration is increased between stakeholders throughout the supply chain.

Carriers also need to address the overcapacity problem, which could be more fully managed via improved capacity management tactics in 2016, however careful planning and inter-sector collaboration has been left wanting in recent months.

Technical Paper: Huge Overcapacity: In Absence of Demand

Watch a video below with Olaf Merk, Administrator of Ports and Shipping with the ITF at the OECD, in which he provides 4 ways in which shipping can cut overcapacity:

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