MLU 1.

6 Industrial of Shipping Systems1950-2015 12/01/2016

Updated May 2014

MARITIME LECTURE 1
Unit 1.6 Industrial of Shipping Systems1950-2015
Trade expansion on this scale would not have been
possible without a major reform of the transport system.
The new transport model that emerged gradually over
twenty years had the three segments shown in Figure
1.10, bulk shipping, specialized shipping and
containerisation. During the next thirty five years many
new ship types were developed, including bulk carriers,
supertankers, liquefied gas tankers, chemical tankers,
vehicle carriers, lumber carriers and of course
containerships.
Maritime Economics 3rd Ed page 39

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Unit 1.6 Industrial Shipping Systems1950-2015

Issues to cover in unit 1.6 Charts used in unit 1.6
 Liners & tramps became uneconomic 1. Liners & tramps now uneconomic
 The mechanization of cargo handling 2. The mechanisation of cargo handling
 Bulk, specialized & container systems 3. The 3 key principles for improving
 Bulk shipping efficiency
 Unitization of general cargo 4. Principle 1 economies of scale (2 charts)

 Specialized ship systems 5. Principal 2: better engines, lower fuel

consumption
 Offshore flags
6. Principal 3: mechanised cargo handling (2
charts)
Study Material for Unit 1.6 7. Specialised shipping – ships tailored to a
1. Maritime Economics 3rd Ed p 39-44 specific cargo
2. Quick test 8. Flag versus beneficial ownership of a
3. Videos and web links vessel

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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S1 Liners & tramps became uneconomic

 The liner & tramp system was built around
small ports, mixed cargoes and passengers
all in moderate volumes
 By the 1960s the escalating labour and
time costs quadrupled the cost of handling
liner cargo (shown opposite) fivefold!
Loading Costs in London 1870-1970
Year £ per Actual value Value in
dwt 1870=100 1870 terms
1870 0.03 100 100
1910 0.05 1,662 208
1930 0.09 300 280
1940 0.17 566 468
1950 0.52 1,733 737
1960 0.73 2,433 647
1970 3.33 11,100 1989 Wow!
1975 8.03 26,777 1598 Liners & tramps in Rotterdam 1977
Source: "Costs of Operating British General Cargo
Ships, 1870-1970" P.M.Alderton – the transition took a long time
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S2 New transport system in the 1950s & 1960s

Bulk Liquids Unit Load Refrigerated Manufactures

Bulk Shipping Specialised Container Air

Homogeneous Shipping Shipping Freight
cargoes Specialized cargoes Unitized cargoes Urgent cargo

Bulk carrier, tanker

Specialised Container ship Air freighter
ships
The mechanization of sea transport was needed to support globalisation. It involved
splitting transport into four segments where investment could be applied
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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S3 Three changes – big ships; better engines; mechanization

 Small tramp ships were too expensive and ports got clogged up with the
escalating volume of “break bulk” cargo
 Easy ways to improve efficiency were – 1) bigger ships 2) better engines 3)
mechanization terminals
 The cargo owners built bigger ships, mechanized cargo handling and developed
specialized ships for “difficult” cargo to improve efficiency

3) Mechanized cargo handling

2)Better engine

1)Big specialised ships

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S4 Principle 1: Economies of scale (i.e. bigger ships)

• Average tanker size took off in
1960, and peaked out in 1980 1908 1977 1980
120 Iraquois & Navahoe Pierre Guillaumat Seawise
• Ships got much bigger and more Tank barge system of 546,265 dwt Giant
17,000 tons (148 lengthened to
specialized 100 Atlantic crossings)
1968 555,843 dwt
Universe Ireland
• The average size of tanker 1903
326,585
Averagetankersize000dwt

Narraganset 1966
remained below 20,000 dwt until 80 12,500 dwt Idemitsu Maru
1960 when the closure of the Suez 1917
206,106 dwt
1959
Canal in 1956 and growing 60
SS Cadillac
17,000 dwt Universe Apollo
Japanese oil imports triggered an 1901
Sailing tanker 1950
122,867 dwt
1953
escalation in the average size to 40 Brilliant SS Velutina Tina Onassis
29,467 dwt 45,000 dwt
over 100,000 dwt. 3,765 GRT
1943
Esso Birmingham
The biggest ships were 500,000
20
• T2 tanker 16,467 dwt
dwt, but the average size of tanker 0
peaked in 1980 and then remained 1900 1920 1940 1960 1980 2000
relatively stable.
Source: Compiled by Martin Stopford from various sources
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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S5 This puts the size increase for bulk ships into perspective

450,000 dwt (1977) 100,000 dwt (1962) 16,000 dwt (1945) 3,000 dwt (1886)

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S6 Principle 2: better engines, lower fuel consumption

Fuel consumption 60,000 dwt bulk carriers TPD at 14.5 knots in tonnes per day
80.0
Consumption 65-75 Consumption 76-88 Consumption 89-2000
70.0

60.0

50.0

40.0

30.0

20.0 New 60k dwt

eco-Supramax
10.0
28 Tonnes/day
Source: based on Clarkson Research World Fleet Register
-
1965
1973
1977
1980
1982
1983
1984
1987
1990
1994
2004
2006
2008
2009
2010
2010
2010
2011
2011
2012
2012
2012

Year In which the bulk carrier was delivered

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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S7 Principle 3: Mechanized Cargo Handling

Hatch cover
grab

Storage area

An iron ore unloading terminal in Rizhao, east China’s Shandong Province. The
© Marecon Ltd
biggest iron ore terminal at Qingdao
12-Jan-16
handles 50 Mt a year (looks
Lecture 1: Sea Transport in the Global Economy
like coal?)
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S8 Containerization mechanized general cargo

• One of the great innovations of the last

50 years – massive improvements in
efficiency and reliability
• April 26, 1956 Malcolm Maclean
loaded 58 containers aboard Ideal X
(Tanker) from Port Newark to Houston
–
• In 1957-58 six more ships converted
into ‘Trailerships’ – as they came to be
known then.
• By 2014 there were 5,087
containerships, the biggest of which
was 200,000 Gt

10
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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S9 Mega-containerships - ten times bigger than cargo liner

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S10 Specialized Shipping – ships built for a specific cargo

 New specialised ships were
developed for specific trades
 Chemical tankers
 LPG tankers
 LNG tankers
 Open hatch bulk carriers Chemical tanker
 Car carriers

LPG Tanker Car carrier

Forest products
LNG Tanker carrier
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MLU 1.6 Industrial of Shipping Systems1950-2015 12/01/2016

S11 Changing shipping company organization

Table 1.9 World Merchant Fleet by country M GRT/GT
Start of year 1902 1950 2005 2015
W Europe & USA
 As the shipping industry changed so Britain 14.4 18.2 9.8 14.4

did the companies that ran it. USA

US Reserve
2.3
0.3
16.5
11.0
12.5
n/a n/a
9.9

 In 1950 71% of the fleet was registered Holland

Italy
0.6
1.2
3.1
2.6
5.7
11.1
7.7
16.1
in Europe and the United States, and Germany
Belgium
3.1
0.3
0.5
0.5
9.1
3.5
10.5
5.5
29 per cent in overseas flags. France 1.5 3.2 4.3 5.8
Spain 0.8 1.2 2.2 2.3
 By 2015 Europe and US share had Sweden 0.7 2.0 3.6 2.7

fallen to 11%, whilst other flags had Denmark

Danish Int.
0.5
0.0
1.3
0.0
0.7
6.9
n/a
15.1
89% Total
% world fleet
25.7
80%
60.0
71%
69.4
11%
90.0
7%
 The reason is that many of the ships Other flags
Liberia 0.0 0.2 55.2 131.4
owned by European and US Panama 0.0 3.4 136.1 220.8

shipowners are “flagged out”. For Greece

Japan
0.3
0.6
1.3
1.9
32.7
12.7
42.9
21.3
example in 2015 there was 10.5 m GT Norway
Others
1.6
4.0
5.5
12.3
3.6
342.8
13.6
688.0
under the German flag, but German Total 6.5 24.6 583.1 1,118.0

owners controlled 93 m Gt of ships. % world fleet

WORLD
20%
32.2
29%
84.6
89% 93%
652.5 1,208.0
Source: Lloyds Register, Clarkson Research
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Updated May 2014

The End
Unit 1.6: Industrial shipping systems develop

What to do now:
1. Run through the quiz for unit 1.6
2. Read ME3 pages 35-43
3. Download the text and slides for Unit 1.7
4. Make a date to work on Unit 1.7

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