Sunday, October 21, 2018

The “Second Scenario”: Mega-ships and the future of the hub-and-spoke system in liner shipping



The first time I expressed my concerns about the mega-containership phenomenon was in 2000, in my “second scenario”.[1] I could then see 6 macro-trends, reinforcing each other, which could potentially halt the gigantism in container shipping, as well as in mega-hub-port development. These trends were: i) worldwide port development; ii) regionalization of trade; iii) infrastructure development in southern Europe; iv) road pricing in Europe; v) the future of liner shipping alliances; and vi) the impact of information technology.

I was laughed at then, as “the professor with the different opinion”. You see, those were the days when everybody was talking about the Malacca-Max (18,000 TEU) ships and similar creativities, which were listened to, unfortunately impulsively, by many ports. And I was laughed at again, because ships continued to grow unabated, in spite of the fact that my six trends had conspicuously materialized in these 18 years since 2000.

This, however, was not due to a failure of the underlying trends to influence ship-size development, but to failure in regulatory policy; both in terms of our inability to develop a coherent port policy in Europe, and our ‘eyebrow-raising’ leniency towards increasing concentration in liner shipping, in the form of global shipping alliances.

CMA-CGM, Drewry, OECD, and Fairplay[2] now believe that things may have started to change. Adding a note of personal gratification, I am happy to take note of their recent conviction. However, things have started to change 20 years ago; we only didn’t know it; or did we?

HH 




[1] Haralambides, H.E. (2000) A second scenario on the future of the hub-and-spoke system in liner shipping. Latin Ports and Shipping 2000 Conference, Lloyd’s List, 14-16 November 2000, Miami, FL., USA—(you can download the paper from my Academia and ResearchGate profiles).

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