Container Shipping

Container shipping is the dominant method of international transportation for a broad range of industrial and consumer goods, chemicals and foodstuff. Containers are modular metal boxes of standardised dimensions, generally 20 or 40 feet long and measured in Twenty-foot Equivalent Unit (“TEU”) or Forty-foot Equivalent Unit (“FEU”). Moreover, specialised containers such as reefer (refrigerated), flat racks, open-top or removable hard top containers allow for transport of cargo not suitable for standard containers (e.g. fresh fruit in reefer containers). Ships generally carry a mix of TEU and FEU container boxes both on and below deck. Deck-stowed containers on an 11,000 TEU vessel are stacked up to seven to eight high and nineteen across, inter-locked with fittings and secured by special lashings.

Container Liner Companies

Container liner companies operate regularly scheduled services between a series of ports, generally on a fixed day each week or otherwise on a regular basis. Each shipment is part of an unique supply chain involving accurate and safe transfer of goods between various modes of transportation such as ships, airplanes, railway trains and trucks.

Most container liner companies do not own their entire fleet, but instead rely on vessels leased or chartered (either long- or short-term) from third party tonnage providers to handle some proportion of their total capacity requirements. This gives carriers increased flexibility in adjusting capacity in response to demand peaks, and allows better deployment of vessel capacities in response to changing demand structures between trades a liner company is active in.

Tonnage Providers

Tonnage providers, such as MPC Container Ships, own and charter-out container vessels to liner companies. Most vessel charters involve the ship owner providing a vessel to the carrier for a fixed period of time, with the ship owner also providing the ship’s crew, insurance and maintenance on the vessel. In common time charter agreements, the carrier is responsible for voyage costs, such as bunker fuel, canal charges and port fees.

Container Vessels

The fleet used to carry containers is made up of ocean-going vessels in different sizes, each with particular characteristics. Larger vessels will benefit from economies of scale and are best suited for long hauls between large ports, while smaller vessels have the flexibility to enter smaller ports. Large ports have on-shore cranes to load/offload containers to/from vessels and some smaller ports can only handle vessels equipped with on-board cranes, i.e. geared vessels.

The size classes of container vessels can be categorized as follows:

  • Ultra-large container vessels: Vessels with a container carrying capacity above 14,501 TEU that cannot pass through the new Panama Canal (opened in June 2016) due to size restrictions. These vessels are mainly deployed on Asia/Europe services.
  • New-panamax: Vessels with a container carrying capacity between 5,101 and 14,500 TEU that are able to pass through the new Panama Canal. These vessels are deployed on a wide range of long-haul services, e.g. Mainlane East/West, Non-Mainlane East/West and North/South.
  • Panamax: Vessels of a size range between 3,001 and 5,100 TEU that used to be the largest vessel sizes able to pass through the Panama Canal prior to its extension. These vessels are deployed on a wide range of intermediate services worldwide.
  • Feeder: Vessels between 1,001 and 3,000 TEU that are mainly deployed in intra-regional services. About half of these vessels are equipped with cranes in order to serve small ports in less-developed regions.
  • Small feeder: Denotes vessels of up to 1,000 TEU capacity that are trading in small volume feeder services.

MPC Container Ships

MPC Container Ships focuses on the ownership and operation of smaller container vessels deployed in regional and intra-regional services due to a combination of distance, volumes and port infrastructure restrictions as well as flexibility requirements, e.g. transhipment of containers from large vessels at deep-water ports into smaller vessels serving minor ports in the regions (hub-and-spoke supply chains). Intra-regional services support main services by connecting ports on intercontinental shipping lanes with one or more smaller ports, which are not services by the main line vessels.

For more information and statistics on the container shipping industry, please visit the World Shipping Council.

For an overview of industry terms, please click here.

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