Largest Cargo Container Ship Makes West Coast Port of Call

CMA CGM Benjamin Frankling (Photo courtesy of CMA CGM)
CMA CGM Benjamin Franklin (Photo courtesy of CMA CGM)

Cargo container ships are getting bigger. Just ask anyone who watched as the CMA CGM Benjamin Franklin — the largest cargo vessel ever to make port at a North American port — pulled into the APM Terminals-Pier 400 at the Port of  Los Angeles on Dec. 22.

How big is this Goliath of a cargo ship? It’s the size of the Empire State Building had it been set on its side. And with a capacity of nearly 18,000 cargo containers, it’s about a third larger than any other container ship currently at port at the San Pedro  Bay facility.

Explosion in Cargo Ship Size

The cargo container ship industry is undergoing something of an arms race as shipbuilding companies set out to prove whose can build the biggest ship. The advent of these mega ships has meant that vessels can now carry nearly twice as many cargo containers as the largest ships build just five years ago.

Part of this increase has to do with the increased popularity of global shipping. Overseas manufacturers are discovering that they can cut costs through economies of scale by shipping their products to foreign markets on these super-sized cargo container ships.

The industry is also preparing for the future. Recent widening and expansion projects at both the Panama and Suez canals now mean that these nearly 100-year-old man-made shipping routes can now accommodate these types of larger ships. Whereas before super-sized ships were limited largely to West Coast ports in the US, now they can make port at facilities up and down the Eastern Seaboard.

Playing Catch Up

But while these mega-carriers have been docking at European and Asian ports for about the past five years, US ports have been largely “tardy to the party”. Many ports currently are undergoing infrastructure improvements — including deeper channels and larger cranes — so they can handle these super-sized carriers.

Then there’s the stress they put on the supply chain. Bigger vessels carrying substantially bigger cargo payloads create a need for more dockworkers to unload these ships, as well as more truck drivers and rail carriers to haul these goods across the country.

And while the US is finally crawling out of the economic hole caused by the Great Recession, the shipping industry has had to reverse its course of cost-cutting and consolidation in order to gain market share and efficiency.

Benefits of Bigger Ships

The biggest benefit of super-carriers like the CMA CGM Benjamin Franklin and others is that they not only can carry substantially more cargo, but they can do it cheaper than smaller ships: Mega carriers burn less fuel.

But there’s another incentive to building these types of vessels: Borrowing rates are near historic lows. So financing the $150 million or so it costs to build each of these behemoths has never been more affordable.

One unintended side effect to this shipbuilding boom has been falling cargo rates. Now that supply has increased, it has surpassed demand.

A report from Moody’s Investors Service in November estimated that while global cargo ship capacity would grow about 8% to 10%, demand was only expected to increase 3% to 4%.