University of Gothenburg, School of Business, Economics and Law, March 1, 2013 Global Containerized Maritime Shipping: Emergence and Divergence Jean-Paul Rodrigue Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA

THE EMERGENCE OF CONTAINERIZATION

Density of Ship Log Entries,

Maritime Shipping Routes and Strategic Locations

The Container as a Transport, Production and Distribution Unit

Diffusion Cycle of Containerization New (niche) services Productivity gains Network development Productivity multipliers Massive diffusion Network complexities Niche markets Diffusion Level Time Adoption Acceleration Peak Growth Maturity

Containerization as a Diffusion Cycle: World Container Traffic ( ) and Scenarios to 2015 Divergence Reference Depression Adoption Acceleration Peak Growth Maturity

The K-Wave of Containerization Adoption Acceleration Peak Growth Maturity K-Wave Phase (Wave) Transition (A) A B Seasonal Cycle (B) Time (Decades) Traffic Years Months Source: Guerrero and Rodrigue (2013)

Hierarchical Cluster Analysis Parameters of Global Container Ports, Dissimilarity dendrogram for 7 classes A B.1 C D.1 D.2 E B.2 Dissimilarity Level High Low First Wave Second Wave Third Wave Fourth Wave Fifth Wave Source: Guerrero and Rodrigue (2013)

The First Wave of Containerization, 1970 – The Pioneers of the Triad Pioneer ports setting containerized operations in the economic triad (North America, Western Europe, Australia and Japan). Driver: Trade substitution Source: Guerrero and Rodrigue (2013)

The Second Wave of Containerization, 1980 – Adoption in the Triad and its Periphery Expansion of the triad and its trade partners (Caribbean, Mediterranean, Asian Tigers). Driver: Adoption of containerization Source: Guerrero and Rodrigue (2013)

The Third Wave of Containerization, 1990 – Global Diffusion Large diffusion in new markets (Latin America, Middle East / South Asia, Southeast Asia). Driver: Setting of global supply chains. Setting of transshipment hubs. Source: Guerrero and Rodrigue (2013)

The Fourth Wave of Containerization, 2000 – Global Standard The container as the standard transport support of the global economy. Driver: Expansion of global supply chains. China and transshipment hubs. Source: Guerrero and Rodrigue (2013)

The Fifth Wave of Containerization, 2010 – Peak Growth Peak growth and the setting of niches. Driver: Spillover effect and new transshipment hubs. Source: Guerrero and Rodrigue (2013)

Waves of Containerization, Each wave lasts 8 to 10 years. Hierarchical diffusion pattern. Source: Guerrero and Rodrigue (2013)

DIVERGENCE: GLOBAL TERMINAL OPERATORS AND TRANSSHIPMENT HUBS

Typology of Global Port Operators

Factors behind the Interest of Equity Firms in Transport Terminals

Top Twelve Global Container Terminal Operators by Equity-Based Throughput, 2010

Container Terminal Surface of the World's Major Port Holdings, 2010

Container Terminals of the Four Major Port Holdings, 2010

The Insertion of Intermediate Hub Terminals 85% of Transshipment Traffic15% of Transshipment Traffic

Transshipment Volume and Incidence by Major Ports, Asia – Mediterranean Corridor Caribbean Transshipment Triangle East Asia Cluster Northern Range

Gateways and Transshipment Hubs: Different Dynamics Monthly Container Traffic (Jan 2005 =100)

CHALLENGES TO CONTAINERIZATION

An Expected Shift in Containerization Growth Factors

Evolution of Containerships A B C D E Early Containerships (1956-) Panamax (1980-) Post Panamax (1988-) New Panamax (2014-) Fully Cellular (1970-) Panamax Max (1985-) Post Panamax Plus (2000-) Post New Panamax (2006-) Triple E (2013-) 500 – 800 TEU 1,000 – 2,500 TEU 3,000 – 3,400 TEU 3,400 – 4,500 TEU 4,000 – 5,000 TEU 6,000 – 8,000 TEU 12,500 TEU 15,000 TEU 18,000 TEU 200x20x9 137x17x9 215x20x10 250x32x x32x x40x13 300x43x x49x x59x x56x15.5 ; 22–10–8 (not shown) (LOA – Beam – Draft) A B C D E 6 containers across 4 containers high on deck 4 containers high below deck

The Largest Available Containership, (in TEUs) L “Lica” Class (3,400 TEU) R “Regina” Class (6,000 TEU) S “Sovereign” Class (8,000 TEU) E “Emma” Class (12,500 TEU) “Triple E” Class (18,000 TEU)

Potential Impacts of Larger Containerships on Maritime Transport Systems

Fuel Consumption by Containership Size and Speed Ship Size (TEU) Normal Speed Slow Steaming Extra Slow Steaming Source: adapted from Notteboom and Carriou (2009)

Containerized Cargo Flows along Major Trade Routes, (in millions of TEUs)

Average Container Usage during its Life-Span

Why Hinterland Transportation Matters? The Space / Cost Dichotomy of Forelands and Hinterlands FORELAND 90% 10% Distance 20% 80% HINTERLAND Costs Port

The Inland Logistics Challenge: The “Last Mile” in Freight Distribution CapacityFunnelFrequencyFunnel Capacity Gap Economies of scale Frequency Gap FORELAND HINTERLAND Main Shipping Lane Inland Terminal INTERMEDIATE HUB GATEWAY

Main Routing Alternatives between the Pacific and Atlantic

Main Routing Alternatives between East Asia and Northern Europe

Conclusion: Potential Structure of the Global Container Transport System