IDEAS home Printed from https://ideas.repec.org/a/taf/transp/v31y2008i4p435-463.html
   My bibliography  Save this article

In Search of the Link between Ship Size and Operations

Author

Listed:
  • Christa Sys
  • Gust Blauwens
  • Eddy Omey
  • Eddy Van De Voorde
  • Frank Witlox

Abstract

Since 1990s the liner shipping industry has faced a period of restructuring and consolidation, and been confronted with a continuing increase in container vessel scale. The impact of these changes is noticeable in trade patterns, cargo handling methods and shipping routes, in short ‘operations’. After listing factors influencing size, growth in container ship size is explained by economies of scale in deploying larger vessels. In order to quantify economies of scale, this paper uses the liner service cash flow model. A novelty in the model is the inclusion of +6000-20-foot Equivalent Unit (TEU) vessels and the distinction in costs between single and twin propeller units on ships. The results illustrate that scale economies have been -- and will continue to be -- the driving force behind the deployment of larger container vessels. The paper then assesses the link between ship size and operations, given current discussions about the increase in container vessel scale. It is found that (a) ship size and operations are linked; (b) optimal ship size depends on transport segment (deep-sea vs. short-sea shipping, SSS), terminal type (transhipment terminals vs. other terminals), trade lane (East-West vs. North-South trades) and technology; and (c) a ship optimal for one trade can be suboptimal for another.

Suggested Citation

  • Christa Sys & Gust Blauwens & Eddy Omey & Eddy Van De Voorde & Frank Witlox, 2008. "In Search of the Link between Ship Size and Operations," Transportation Planning and Technology, Taylor & Francis Journals, vol. 31(4), pages 435-463, June.
    • Handle: RePEc:taf:transp:v:31:y:2008:i:4:p:435-463
    DOI: 10.1080/03081060802335109
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03081060802335109
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03081060802335109?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gadhia, Hitesh K. & Kotzab, Herbert & Prockl, Günter, 2011. "Levels of internationalization in the container shipping industry: an assessment of the port networks of the large container shipping companies," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1431-1442.
    2. Milan Janić, 2018. "Multidimensional examination of the performances of a liner shipping network: trunk line/route operated by conventional (Panamax Max) and mega (ULC - ultra large container) ships," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-35, December.
    3. Tran, Nguyen Khoi & Haasis, Hans-Dietrich, 2015. "An empirical study of fleet expansion and growth of ship size in container liner shipping," International Journal of Production Economics, Elsevier, vol. 159(C), pages 241-253.
    4. Nestor Goicoechea & Luis María Abadie, 2021. "Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System," Energies, MDPI, vol. 14(22), pages 1-25, November.
    5. Carlo Altomonte & Laura Bonacorsi & Italo Colantobe, 2018. "Trade and Growth in the Age of Global Value Chains," BAFFI CAREFIN Working Papers 1897, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    6. Katrien Storms & Christa Sys & Thierry Vanelslander & Ruben Deuren, 2023. "Demurrage and detention: from operational challenges towards solutions," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-31, December.
    7. Lucija Bukvić & Jasmina Pašagić Škrinjar & Borna Abramović & Vladislav Zitrický, 2021. "Route Selection Decision-Making in an Intermodal Transport Network Using Game Theory," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    8. Jiawei Ge & Mo Zhu & Mei Sha & Theo Notteboom & Wenming Shi & Xuefeng Wang, 2021. "Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 587-614, December.
    9. Monica Grosso & Ana-Rita Lynce & Anne Silla & Georgios Vaggelas, 2010. "Short Sea Shipping, intermodality and parameters influencing pricing policies: the Mediterranean case," Netnomics, Springer, vol. 11(1), pages 47-67, April.
    10. Enrico Musso & Anna Sciomachen, 0. "Impact of megaships on the performance of port container terminals," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 0, pages 1-14.
    11. Enrico Musso & Anna Sciomachen, 2020. "Impact of megaships on the performance of port container terminals," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(3), pages 432-445, September.
    12. Shmuel Yahalom & Changqian Guan, 2018. "Containership port time: The bay time factor," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(2), pages 211-227, June.
    13. Dariusz Bernacki, 2021. "Assessing the Link between Vessel Size and Maritime Supply Chain Sustainable Performance," Energies, MDPI, vol. 14(11), pages 1-21, May.
    14. Wu, Wei-Ming, 2020. "The optimal speed in container shipping: Theory and empirical evidence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean-Marc Siroën, 1993. "Marchés contestables, différenciation des produits et discrimination des prix," Revue Économique, Programme National Persée, vol. 44(3), pages 569-592.
    2. Peter Kuhn, 1982. "Malfeasance in Long Term Employment Contracts: A New General Model with an Application to Unionism," NBER Working Papers 1045, National Bureau of Economic Research, Inc.
    3. Shamsul Arifeen Khan Mamun, 2012. "Stochastic estimation of cost frontier: evidence from Bangladesh," Education Economics, Taylor & Francis Journals, vol. 20(2), pages 211-227, May.
    4. Makoto Yano, 2005. "Coexistence of large firms and less efficient small firms under price competition with free entry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(3), pages 167-188, September.
    5. Boone, J., 2004. "Balance of Power," Other publications TiSEM d3f8cd4b-eaf0-4c1c-aed4-5, Tilburg University, School of Economics and Management.
    6. Benard, Jean, 1987. "Socialist incentive schemes and price planning," CEPREMAP Working Papers (Couverture Orange) 8735, CEPREMAP.
    7. Aslan, Hadiye & Kumar, Praveen, 2016. "The product market effects of hedge fund activism," Journal of Financial Economics, Elsevier, vol. 119(1), pages 226-248.
    8. Barrett, Sean D., 2004. "Bus Competition in Ireland - The Case for Market Forces," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2004(3-Autumn), pages 1-20.
    9. Milton Madison & James MacDonald & Michael Ollinger, 2000. "Technological Change and Economies of Scale in U.S. Poultry Slaughter," Working Papers 00-05, Center for Economic Studies, U.S. Census Bureau.
    10. Dasgupta Utteeyo, 2011. "Are Entry Threats Always Credible?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-41, December.
    11. Boyan Jovanovic, 1993. "The Diversification of Production," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1 Microec), pages 197-247.
    12. Bottasso, Anna & Conti, Maurizio & Vannoni, Davide, 2019. "Scale and (quasi) scope economies in airport technology. An application to UK airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 125(C), pages 150-164.
    13. Maria Lorek, 2013. "Des pôles de croissance vers des systèmes d’innovation territorialisés dans une « nouvelle » économie de marche : le cas de Gdansk, Pologne [The poles of growth and conversion of industrial territo," Working Papers 274, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    14. Subhash C. Ray & Shilpa Sethia, 2022. "Nonparametric measurement of potential gains from mergers: an additive decomposition and application to Indian bank mergers," Journal of Productivity Analysis, Springer, vol. 57(2), pages 115-130, April.
    15. Shi, Guanming & Stiegert, Kyle & Chavas, Jean Paul, 2010. "An Analysis of Pricing in Horizontal and Vertical Markets: The Case of the Cottonseed Market," Working Papers 201439, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    16. Thomaz Teodorovicz & Tainá Leandro & Luiz Alberto Esteves, 2016. "The Evolution Of A Methodology For Relevant Market Definition: An Analysis Of Cade'S Jurisprudence On Private Higher Educational Markets," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 137, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. Boyan Jovanovic, 1998. "Michael Gort's Contribution to Economics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 327-337, April.
    18. W. Erwin Diewert & Kevin J. Fox, 2016. "Sunk costs and the measurement of commercial property depreciation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1340-1366, November.
    19. Ghosal, Vivek, 2007. "Small is Beautiful but Size Matters: The Asymmetric Impact of Uncertainty and Sunk Costs on Small and Large Businesses," MPRA Paper 5461, University Library of Munich, Germany.
    20. Boone, Jan, 2004. "Balance of Power," CEPR Discussion Papers 4733, C.E.P.R. Discussion Papers.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:transp:v:31:y:2008:i:4:p:435-463. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GTPT20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.