Freighters Enter the Age of the Mega-Ship

On the Susan Maersk, size matters.

The Danish-built container ship is more than 3 1/2 football fields long and wider than the Panama Canal.

Descending five levels into the hull is one of the largest marine diesels on Earth, a massive 12-cylinder engine that produces 75,000 horsepower.

Twelve stories above the waterline is a fully automated bridge. It overlooks a plain of steel deck and a series of cavernous holds that can carry 6,600 20-foot-long cargo containers.

When it arrives in Long Beach on Friday, the Susan Maersk will become the largest freighter of its type to ever call at a U.S. port.

Welcome aboard one of the new mega-ships--the latest phase of a transportation revolution that is driving an unprecedented level of capital investment in the nation’s major seaports, especially Long Beach and Los Angeles.

To handle the mammoth vessels, as well as projected increases in foreign trade, port authorities are spending billions of dollars on larger cranes, stronger wharves, bigger cargo terminals and extensive programs to deepen channels and berths.

In Los Angeles and Long Beach alone, at least $4 billion will be spent in the years ahead for new terminals, dredging and rail projects, such as the Alameda Corridor, which are designed to speed cargo to and from the harbor.

“When these large ships come in, they require enormous amounts of space and efficient operations,” said J. Gordon Palmer Jr., manager of planning for the Port of Long Beach, the nation’s largest container port. “I’m not designing 100-acre facilities anymore. I’m designing 300-, 400- and 500-acre terminals.”

After the current projects are finished, however, the nation’s major ports may have to embark on still another round of expensive capital improvements.

There is talk of freighters that can hold up to 15,000 20-foot cargo containers, more than twice the capacity of anything now afloat. No harbor in the world can accommodate such colossal craft.

“If you want to be a future player as a major port, you have to realize that big ships are now a fact of life,” said Tom Boyd, director of marketing for A.P. Moller-Maersk Line, which is building the largest cargo vessels in the world.

Today, there are 92 so-called post-Panamax ships in service that can transport more than 4,000 20-foot containers, according to Clarkson Research Studies in London, an international supplier of maritime data. Another 46 are on order.

Post-Panamax ships are so named because they are too large to fit through the Panama Canal, which is 106 feet wide.

Of the total in service, 29 are truly enormous, with capacities of 5,500 20-foot containers or more, Clarkson said. About 20 ships in this category are on order.

A few mega-ships--those being built by Maersk--can carry 7,000 20-foot containers.

The ships are the result of a booming maritime economy. Trade, both foreign and domestic, is growing at 6% to 9% a year. At the same time, the percentage of the world’s cargo shipped in containers is increasing steadily.

If projections are correct, the volume of the world’s general cargo carried in containers, including consumer goods, textiles and many foods, will increase from 60% to 90% by 2020.

The U.S. Maritime Administration, which regulates domestic shipping, predicted in 1997 that at least a third of all general cargo will be carried on post-Panamax container ships by 2010.

Volume Makes for Higher Profits

“If you link the trends together, the world’s container growth is 8% to 9% a year,” said John Vickerman, a principal partner in TranSystems Corp., a leading maritime consulting firm. “What that says is by 2010 or 2020, we will have a doubling or tripling in volume.”

On the world’s busiest trade routes, such as Asia to the United States and Asia to Europe, post-Panamax vessels are expected to produce considerable savings for their operators. Not only can major carriers take advantage of economies of scale, they can form alliances to share cargo space and further reduce their costs.

“Profit margins have eroded worldwide, and carriers are opting to make it up through higher volumes,” Boyd said.

Although cost savings are anticipated, the stakes remain high because enormous outlays of capital are required. Post-Panamax vessels cost anywhere from $80 million to $140 million to build.

Despite their automation and small crews, big ships are still expensive to operate, costing at least $100 a minute in overhead and lost productivity to sit in port. That’s $6,000 per hour, or $140,000 if they arrive in the morning but don’t depart until the next day.

The growing fleet of super ships might also contribute to an overcapacity of cargo space that will depress prices in some markets. While good for consumers, it could be risky for shipping lines.

“Can they fill these big ships? That’s a very big question mark,” said Asaf Ashar, group manager of ports and intermodal systems for the National Ports and Waterways Institute.

Other experts contend that overcapacity is confined to smaller container vessels, particularly those that are chartered. The larger ships, they say, generally sail in markets that have enjoyed steady rates of growth.

“Most of the post-Panamaxes being built and those already in service are for carriers responding to levels of traffic growth that have continued to rise by 6% to 8% a year for the last 30-odd years,” said Rogan McLellan, director of container research for Clarkson.

The giant ships now joining the world fleet hardly resemble the ship that started the container revolution, the Ideal X, a former Navy oil tanker that sailed out of Newark, N.J., on April 26, 1956.

Designed by Malcolm P. McLean, the owner of a trucking firm, the 523-foot vessel carried 58 shipping containers that were loaded by crane and lashed to the deck.

McLean’s labor-saving innovations would completely change the shipping industry. What used to take gangs of longshore workers days to perform could now be done in a matter of hours.

By 1980, the average capacity of a container ship was about 1,000 20-foot boxes. The largest freighters could carry more than 3,000.

Then American President Lines abandoned the idea of letting the dimensions of the Panama Canal dictate ship design. The line’s naval architects and executives believed that gains in capacity and cost savings could only be achieved by building larger vessels and assigning them to specific oceans, bypassing the canal entirely.

They also noted that developing intermodal systems--rail and truck routes that moved cargo in the same containers inland from the nation’s ports--were steadily eroding the canal’s necessity.

American President joined forces with HDW, a German shipyard with experience building supertankers. In 1988, they put the President Truman into service with a capacity of 4,350 20-foot containers.

The vessel was the largest of its type and the first post-Panamax ship. Several years later, the President Truman was surpassed by the APL China, which can carry about 5,000 containers.

Giant Vessel Requires Minimal Crew

American President Lines’ freighters have now been eclipsed by Maersk, which is owned by A.P. Moller Group in Denmark. The company is developing a fleet of 15 ships with capacities of 6,000 or more 20-foot containers. Maersk’s biggest freighters--the S Class--can carry at least 7,000 boxes.

In recent years, the worldwide container capacity of post-Panamax ships has risen significantly. In 1997, about 60% of new container ship orders were for post-Panamax vessels.

The larger craft are truly immense--as long as aircraft carriers and as high as 12-story buildings.

The Regina Maersk, which called regularly at the Port of Long Beach, used to be the largest container ship calling at U.S. ports until the Susan Maersk replaced it.

Within its 1,044-foot-long hull, the Regina Maersk can carry more than 6,000 20-foot containers. Walking between the towering stacks of steel boxes on deck is comparable to a stroll down a city block.

The massive deckhouse is like an office building. The skipper’s quarters are more executive suite than ship cabin. Art hangs in the passageways outside.

Capt. Jens Christiansen commands the vessel by keyboard and mouse. His courses are plotted and recorded on computer. Navigation charts can be called up on video screens, and the ship’s machinery is monitored from a console of display terminals in the control room.

The bridge is so automated that one person can practically run the vessel. No one is really needed in the engine room except in emergencies or for repairs. With all the automation, only 15 crew members are required.

“It can get a little lonely around here,” Christiansen says.

Most U.S. harbors cannot handle vessels like the Susan and Regina Maersk, with their deep drafts and enormous capacities for cargo.

In the near future, port planners say, the preferred harbors will be those with efficient terminals, good highway and rail connections, the best computer equipment, and the most powerful and nimble cranes.

In Los Angeles and Long Beach, port authorities are dredging channels and building berths to depths of as much as 55 feet. Planned terminals, such as Pier 400 in Los Angeles and the former Long Beach Naval Station, will have longer wharves and on-dock rail lines to speed cargo from the port.

Both harbors are planning to install towering cranes with reaches of 150 to 180 feet, long enough to traverse the wide beams of post-Panamax vessels.

Terminal sizes are expected to grow substantially as well. In the future, facilities of 200 to 500 acres will be necessary, port planners say.

In addition, Long Beach and Los Angeles have heavily invested in road improvements and the $2.4-billion Alameda Corridor, a 20-mile rail project to hasten the movement of cargo from the harbor to intercontinental rail yards.

“We are trying to be ahead of the curve, more so than other ports,” said Albert B. Fierstine, director of business development for the Port of Los Angeles. “We want to be a major player in the future, and we have the capital to make it happen.”

Besides improvements in cargo facilities, safety zones outside local port entrances are being increased by 1 1/2 miles. Harbor pilots and the Coast Guard are revising procedures for getting the big ships to berth.

Long Beach harbor pilots say that when they stand in the center of the bridge on some freighters, they can’t see any water as they maneuver in the port’s back channels.

Pilots say that powerful bow and stern thrusters, range lights, radar and the use of a second pilot have reduced the difficulties of guiding the bigger ships into the harbor.

“With very large vessels in constrained channels, there is less room for error,” said Cmdr. Steve Billian, of the Waterways Management Directorate of the Coast Guard. “You must take extra care.”

Ports that hesitate to invest in updated facilities may suffer in the long run if they lose tenants to more motivated competitors. Today, port consultants say, the largest and wealthiest U.S. harbors are growing faster than smaller ones.

The pressure to do something is becoming more intense because post-Panamax ships make fewer port calls, leaving some harbors with potentially fewer tenants and ships that pay rent, tariffs and fees.

“If you are left behind by the big ships, are you going to be left behind in the future?” said Mark Sisson, a transportation analyst with Jordan, Woodman & Dobson, an Oakland-based port consultant. “There are still smaller ships out there, but are they going to be enough to pay for harbor facilities?”

The Port Authority of New York and New Jersey faced the possible loss of two longtime tenants, Sea-Land Services and Maersk, had it not offered them a proposal for new deep-water facilities. The two companies account for about 22% of the port’s container volume.

Harbor officials estimate that the terminal project, which includes dredging and new rail lines, will cost about $180 million. Competing with New York were the ports of Baltimore and Halifax, Nova Scotia, in Canada. A deal was announced in May.

To make the point that New York needed improvements, the Regina Maersk sailed into the port during its maiden voyage last year. It had to be lightly loaded because the harbor is shallow.

“Maersk wanted to send the port a message,” Vickerman said. “And, they wanted to send a signal to the industry.”

But how much larger can the ships and port terminals go? There is talk of building vessels big enough to carry 15,000 containers, but that would require a massive change in harbor facilities worldwide.

In one futuristic scenario, these enormous craft would call on five mega-hubs worldwide--Southeast Asia, the Caribbean, the western exit of the Mediterranean Sea, the west coast of Central America and the Persian Gulf.

The vessels might tie up to offshore facilities where cranes would transfer containers to smaller ships bound for regional ports. Such a necklace of mega-hubs could take 20 years to construct.

“The 15,000-container ship is a flight of fancy. No one knows how the infrastructure would absorb them,” said Tom Winslow, an Oakland-based consultant who pioneered post-Panamax freighters as American President’s chief naval uarchitect for 23 years.

Still, harbor officials can’t rest easy. The Port of Amsterdam is experimenting with slip wharves that might accommodate ships that hold 8,000 to 9,000 20-foot containers. In a radical departure from current designs, the wharf would wrap around the vessel, allowing cranes to remove cargo from both sides.

“You’ve got to be sticking your head above the wheat field in this business,” Vickerman said. “The moral of the big ship is, how do you create flexible port planning to ensure that what is built can service the future while meeting the demands of today?”

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Super Freighters

A growing fleet of giant container ships is helping to fuel an unprecedented level of capital investment in many of the nation’s major seaports, including Long Beach and Los Angeles. The largest container vessel to call in the United States will be the Susan Maersk, scheduled to arrive Friday in Long Beach. The Susan Maersk can carry 6,600 20-foot shipping containers.