A top name in the Italian ports sector has accused liners of creating their own downfall by concentrating on creating fleets of ultra large ships.
The head of the Venice port authority, Pino Musolino, has questioned the fleet profile of today’s leading liners as they grapple with the coronavirus and dropping demand.
Reacting to a recent Wall Street Journal article that described ultra large container vessels (ULCVs) as financial albatrosses, Musolino, who used to work as a risk manager at German carrier Hapag-Lloyd, took to social media platform LinkedIn to question the decision to order en masse ships above 16,000 teu in capacity.
“The cost structure and organisation on which ULCVs’ profitable management is based appears fragile, thin as an ice sheet. In addition, the enormous financial weight that building big fleets of these ships places on the carriers’ shoulders weakens their responsiveness and ability to compensate for possible economic and liquidity crises,” Musolino wrote.
Musolino, whose port has recently been excluded from direct services to and from Asia due to insufficient depth, continued: “Having believed in a development of the global economic system without significant exogenous shocks that could make that plate creak is showing all the hubris and short-sightedness of such planning.”
The port boss then went on to describe the “enormous” investments, often from public resources, necessary ashore to ensure access, time and efficient operations for the management of ULCVs.
He concluded by writing: “At the first real sign of difficulty the whole construction is beginning to wobble. The real risk is an unprecedented system crisis along the entire supply chain, with container carriers at the center of a perfect, self-inflicted storm, with high and unpredictable waves.”