Mega-ships: which impacts for port-cities?

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MAL_picture_olaf_merk_105-135Cities and shipping are hugely interdependent. The steamship made port-cities nodes in an emergingly connected world economy. The container ship radically reduced maritime transport costs and spurred globalisation, but also meant the decline of some of the previously dominant ports, such as London, Liverpool and Baltimore. We are now witnessing another revolution in shipping that will severely change the urban landscape: the arrival of ultra large ships and – related to this – ultra large shipping companies and ultra large ports. It might mean the decline of upstream estuary ports that have a problem accommodating ships with deep draughts, and we could see more offshore ports. The relation between port and city will change and become more challenging. The transition will be costly. Ports will want to be “mega-ship ready” and not fall out of the Champions’ League of ports. This will cost money: for bigger cranes, deeper access channels, stronger quays and more buffer capacity. This is in many cases public money, often from cities: more than half of the ports with mega-ship calls are ports owned by cities. This process is facilitated by an iron grip of shipping lines on ports: they can pressure ports for tariff discounts, investments and additional services, with the ultimate sanction of no longer calling the port. This is a realistic threat, and this could mean sudden huge cargo losses for ports, as lines operate in alliances that share vessels. There will be profound social impacts in port-cities. Mega-ships lead to peaks: suddenly a lot of extra hands are needed to load or unload the ship; hands that are no longer needed when the mega-ship is gone. So more labour flexibility is required, not only inside the port – to get the cargo quickly from the ship, but also in the whole supply chain, to get the cargo quickly out of the port, on trucks, trains and to warehouses and customers. Port-cities will become the cities that – literally – never sleep. Cargo handling needs to go fast: time is money. So container lines put pressure on ports to automate to increase handling speed. In the current sluggish economic climate this means job losses. Mega-ships are also sources of urban air pollution. They have been smartly marketed as green ships. This might be true if ships would be full – but this is not the case, and will not be the case in the coming years. In practice, mega-ships lead to emission peaks. This is particularly problematic for mega cruise ships that often berth very close to urban residents, and that burn a lot of fuel oil even when in ports. In addition, the cargo peaks generated by mega-ships lead to peaks of truck traffic to and from ports that cause urban congestion. Finally, mega-ships need larger container yards, so more land, which is obviously scarce in port-cities – so the emergence of mega-ships might intensify battles on port-city land use. There are other disadvantages, such as risks for cities in case of incidents and the risks for urban supply chains if too much cargo is put on just a few ships in the hands of just a few shipping companies. So, there is enough to worry about. However, no reason to despair. Cities should not be powerless victims: they could actively shape the future of global maritime trade. Mayors of the major port-cities should discuss if their interests are served with ever larger ships. If the conclusion is negative, they could collectively decide to stop accommodating them. Olaf Merk is Administrator Ports and Shipping at the International Transport Forum (ITF) of the Organisation for Economic Co-operation and Development (OECD), international organisation in Paris. As such, he directed studies on ports, port-cities, port regulation and governance. Olaf Merk is the author of various OECD books including “The Competitiveness of Global Port-Cities”. As Administrator of the OECD Port-Cities Programme, his previous post at the OECD, he directed more than a dozen studies on port-cities, including on Hong Kong, Shanghai, Rotterdam and Hamburg. He has authored various port-related articles in academic and professional journals. He is also lecturer on the Governance of Port-Cities at the Institute for Political Science (Sciences Po) in Paris. Prior to the OECD, he worked for the Netherlands Ministry of Finance. He holds a Master’s degree in Political Science from the University of Amsterdam.

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