Maersk hopes for Triple A performance from its Triple E ships
In just over two months, a new behemoth will govern the Northern Sea Route.
At 400 metres long and 59 metres wide, this beast of the sea holds the title of world’s largest ship, able to carry an incredible 18,000 TEU (20ft containers) at full capacity, yet through an incredible feat of engineering, can do it at half of the average CO² output of vessels deployed along the Asia-Europe trade route.
If you have heard the hype in the logistics industry over the past year, then you already know about the Maersk Triple E, the largest containership in the world.
Named after its three core attributes – Economy of scale, Energy efficient and Environmentally improved, the Triple E is optimised to sail with the maximum possible cargo load at slow steaming speeds used by the industry today, thereby reducing its negative effect on the environment.
Equipped with an energy-saving waste heat recovery system, the Triple E recycles about 25 percent of the energy created by the ships’ engine that would normally go to waste through the exhaust system, saving around nine percent of CO² emissions when travelling at optimum speeds.
In addition, the twin skeg propulsion system, which features a double-engine and double-propeller, consumes four percent less energy than the most energy efficient ship currently in operation, the Emma Maersk.
Maersk Line is the clear frontrunner for sustainability in the shipping industry, having met its emissions target for 2020 eight years early in 2012. The low environmental impact of the Triple E ship is a key element of Maersk’s ambitious new emissions reduction goal, according to Jacob Sterling, Head of Environment and CSR at Maersk Line.
“Maersk Line's new target to reduce its CO² emissions by 40 percent by 2020 compared to 2007 will be met through a number of initiatives, such as technical upgrades of vessels, slow steaming and optimised voyage execution. Clearly the 20 Triple-E ships will contribute greatly.
“The Triple-E ships will be the largest ships in the world, which means that they can load a very high number of containers, reducing the level of CO² emitted per container. The ships are designed to operate to relatively low speeds, which has made it possible to install less engine power. While the Triple-E can load 16 percent more containers than the Emma Maersk, the engine power is 20 percent less,” he continued.
Despite its incredible carbon reducing capabilities, the Triple E has had a varied reaction from the shipping industry, which has raised a number of concerns regarding the practicalities of operating such a large vessel. Due to its size, the ship is unable to enter the Panama Canal and many ports in Europe have been forced to undergo large scale construction projects in order to accommodate the Triple E’s vast dimensions.
A further cause for concern is the impact of the Asia-Europe trade imbalance, which is guaranteed to result in Triple E ships that arrive from Asia full returning to China empty, which could reduce the effect of CO² efficiency savings by wasting resources on an empty return journey.
While the new ship’s limitations have caused controversy, Maersk has remained positive about the benefits of the Triple E, with the recent announcement that it is to order a further 10 vessels for delivery in 2014, bringing the total order to 20.
“The ships have been designed and purchased to sail on the Asia-Europe trade, where the cargo volume, ports and infrastructure is generally ready for ships of this size,” Sterling said.
“There is a trade imbalance between Asia and Europe where boxes are generally full going Westbound, but not all boxes will be full going back. The Triple E ships cannot change that.”
Sterling is confident that despite the enormous size of the ships, there is sufficient demand to ensure the Triple E uses the majority of its capacity, as the company bank on a continued growth in Chinese Exports. The company eventually plans to use only Triple E ships for Asia-Europe trade routes, redistributing the ships that are currently used to other routes.
“We expect to make good use of the full capacity of the Triple E. We will manage the capacity of our fleet to ensure a good utilisation of our ships. Of course, they will not always be full, but we have no reason to believe that these ships will be less full than other ships in the Asia-Europe route,” said Sterling.
If the Triple E ship is as successful as Maersk is hoping, we could see the economy of scale applied at an even greater scale, resulting in even bigger ships, according to Sterling.
“It cannot be ruled out that ships will get bigger in the future. Looking back, there has been a clear trend that ships have become bigger and bigger,” he said.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector