This was presented at Elemica's Ignite2015 Conference in Europe on September 15th, 2015.

1. Mega Ships:
A threat to your supply chain?
1

2. Agenda
• Introduction to Participants
• Mega container vessels, history on the market
• Market developments.
• Trends which effect the supply chain.
• How to respond to these trends?
2

3. • Commercial Container transport existing almost 60 years.
• Container demand has been growing
10% year on year far above the
6% growth rate of global trade.
• Transport capacity per ship grew
from 4,000 to 15,000 TEU over a
period of only 15 years.
• The Economic crisis in 2008 disrupted
the traditional container market and forced carriers to think differently.
History
3
The
first
dedicated
vessel
capable
of
transpor7ng
600
containers
started
service
in
November
1955
between
North
Vancouver,
Bri7sh
Columbia,
and
Skagway,
Alaska.

4. Vessel Extension
4

5. Main Container Ports Before
the Mega Vessels arrived
5

6. Market Developments
over the last few years
• New vessels developed to adjust to new Service network.
• Rapid introduction of larger cost efficient vessels
• Large overcapacity on Main routes
• Reduction of ports to call
• Effects on service network
– 2de Sues channel
– New Panama Channel April 2016
– US west coast ports upgrade.
6

7. Trends which effect the
supply chain:
• Mega Ships have a negative impact on supply chain operations.
– Congestion and Trans-shipments
– Transit time increase
– Risk on disruption increases.
– Responsiveness to disruption is poor.
• Mega Ships have disrupted the supplier market.
– Carriers overinvested to maintain market position.
– Competition between carriers will be reduced.
– Joint efforts needed to reduce huge overcapacity.
• Mega Ships do not reduce the total supply chain cost.
– Cost reductions on the Sea-leg will be minimized by cost increase on
terminal handling and regional transport.
7

8. Transport Risks on Sea
8
• 10,000
containers
go
overboard
yearly.
(0.002%)
• On
average
20
cargo
vessels
are
lost
every
year.
Ø This
is
0.03%
of
a
commercial
fleet
of
85,000
vessels.
• Approximately
2,000
lives
are
lost.

9. How to respond to these
trends?
• Adjust network to main ports?
• Extend the sea transport leg with additional transshipments?
• Risk reduction with alternative routing contracted?
• Safety Stock adjustments?
• Container tracking and tracing?
9

10. Carrier alliances
10

11. Closing
11