Oversized ships crowd the high seas while global trade is at its lowest. These jumbo vessels, many longer than three football fields and able to carry over 13,000 containers, can provide tremendous economies of scale if the shippers can fill their holds. Meanwhile, a ship capable of carrying 22,000 containers has been designed by a South Korean shipbuilding company.
With overcapacity and a drop in global trade, shipping rates per container have fallen 90% from a year ago. In fact, some ships will take containers for free and only charge for fuel and transit fees. Yet, shipping companies aren't cancelling orders for new ships, allowing global fleet to increase by 12%, including 200 ultralarge ships in service by 2013.
It will be interesting to see how the shipping industry, currently fragmented with family-led carriers, evolves over the next few years. One thing is for sure that the overcapacity will keep the shipping rates depressed well into 2010, which is good news for the millions of businesses - big and small - that import and export parts and products from overseas!