As an ocean racer, monitoring boat speed and being sensitive to its variation is in my DNA, so naturally when I recently read that “it” had dropped from over 20 knots to around 14 in just a few years, I had to dig deeper and find out what was happening.
What we’re talking about here has little to do with sporting achievements or round-the-world racing, but actually it’s one of the most striking indicators of the economy literally slowing down: as it turns out, the average speed of the container ship fleets criss-crossing the world’s oceans is now down to 14 knots, having dropped by roughly 30% in 10 years.
Shipping is at the heart of today’s economy, and it is estimated that 75% of goods are transported by cargo ships. Obviously, the financial crisis and the rising price of oil are bound to have an impact, but 30% seems like a staggering drop, doesn’t it? Looking at the situation more closely, it appears that maritime transport, like many other sectors of the global economy, has fallen victim to a “bubble effect”, which explains why the fall has been so brutal: between 2000 and the current crisis, there has been a massive boom in container shipping, partly sustained by China’s accession to the World Trade Organisation. The Western world had found a new supplier of cheap electronics, toys, clothes, appliances etc, and those goods could remain very competitive despite the additional cost of transportation to market.
Car carriers and container ships awaiting commission in the River Fal. A sure sign of the recession. © Joss Blériot
As a result, new ships were designed and built with speed and volume high up the priority list. But today, as I’ve learned by reading an article written by Financial Times’s Transport Correspondent Robert Wright, the world’s fastest container ships, known as B Class, are not moving and their future looks unclear. As Wright explains, “Although the oldest is only four years old, conditions have changed so completely they may never see commercial service again without heavy modifications.” Bearing in mind that each ship is thought to have cost approximately £33 million, and that all seven of them are now tied up with no release date, the news is anything but anecdotal. Five of the 300-metre B Class ships, and among them the ‘Boston’ which has never operated on its intended USA / China route, are tied up in Loch Striven, Scotland, while on a bigger scale 10% of the world’s container ship fleet lie idle.
One might ask why the owner of the B Class ships does not simply consider operating them at low speed, in order to keep costs acceptable? Surely this would be preferable to taking those high-tech vessels, which are not 5 years old, off the maritime routes? Common sense would think so – but there is a little problem: those boats have been designed for high speed sailing, and are simply not at all efficient with the throttle rolled back!
This goes to show how quickly things tend to move in today’s world, and how easily huge investments can be compromised by a sudden change of wind – probably one of the many tangible effects of a global economy running wild, and not reacting rationally to sudden surges of activity. The faster things grew in size, the harder they fall today? It might be a bit simplistic but the bottom line is that designing and building tools or systems that will have a significant impact on our world must always be done with the future in mind. We’ve come to a point where simply downsizing and using less is only a temporary solution, what we need is to re-think our models with a clear vision. And going back to the concrete issue which sparked this column, what would a “future-proof by design” ship look like?
The first macroeconomic report series into the size of the prize for business in the transition to a circular economy
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