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When the container ship Hugo pulled into Long Beach, Calif., last month after
a trans-Pacific crossing, its docking was about as easy as parallel parking a
Greyhound bus in a phone booth.
Bigger than the Titanic and nearly as long as the Queen Mary 2, the
1,095-foot-long Hugo required two harbor pilots and three tugboats to guide it
through a narrow shipping channel to the dock. Crew members had to fold down a
radar mast to clear the 157-foot-high Gerald Desmond Bridge -- and made it with
only five feet to spare. Then the ship made a 90-degree turn, its stern narrowly
avoiding a concrete structure known as the "can opener."
Big as it is, the Hugo is just one in a new generation of container ships so
massive that they dwarf ships made just a decade ago. Often longer than three
football fields and wider than the Panama Canal, the $100 million ships are
jammed with Asian-made merchandise that will fill shopping lists and stores
throughout the U.S. before the holiday rush. Like Santa's supersize sleigh, the
Hugo was loaded with toys, electronic goods and clothes. The ship's maximum load
of 8,200 20-foot-long cargo containers could fill a train stretching more than
23 miles.
Spurred by the flood of goods from Asia, growing by about 10% a year,
container-ship lines have put about 90 of these huge ships to work plying the
high seas, estimates Paul Bingham, a principal at the global trade and
transportation practice at consulting firm Global Insight Inc. About 150
additional ships with room for at least 8,000 20-foot-long cargo containers are
being built or on order through 2010, creating $16 billion to $18 billion in
work for shipyards throughout the world.
The shipbuilding spree "is the biggest boom ever seen in container shipping,"
says Neil Davidson, research director at Drewry Shipping Consultants Ltd. in
London.
"We're pushing the limits with these ships," says John Strong, a vice
president of Jacobsen Pilot Service Inc., whose pilots have been steering ships
in and out of the Long Beach port since 1922. "There's no room for error."
But the floating giants are helping to ease some of the stress on the global
transportation system that has worsened as trade volumes increase. In Los
Angeles and Long Beach, the two busiest U.S. container ports, the peak season
that began in August and runs through the end of this month has been smooth
despite record shipment levels. Both ports were snarled by backups and delays
three times in the past decade, but the situation has improved because of more
big ships, new cranes, thousands of extra dockworkers and keeping the ports open
at night and on weekends. When the Hugo arrived in Long Beach, two other massive
container ships already were parked there and a third was leaving.
All of the megaships work routes between Asia and the West Coast or Asia and
Europe, where cargo volumes are the strongest and ports most likely to be able
to accommodate them. By spreading crew and fuel costs over more than twice as
many containers as ships built 10 years ago, the new giants can shrink the cost
of moving containers over the ocean by as much as 30%, says Eivind Kolding,
chief executive of the container business of A.P. Moller-Maersk Group of
Copenhagen.
The shipping lines say that freight rates have fallen about 10% over the past
year, but some customers complain that the lines aren't passing along much of
their savings. Willy Lin, managing director of Milo's Knitwear International
Ltd., a Hong Kong garment producer, says he has seen little net reduction in his
freight rates since the big ships began sailing, due partly to a complex system
of surcharges that shipping lines impose for fuel and other costs. It costs
$1,800 to $1,900 to ship a 40-foot cargo container to Long Beach from Shanghai.
While not yet as large as supertankers built in the 1970s and 1980s to haul
crude oil from abroad to the U.S., the biggest container ships can store
thousands of containers in their hulls and nearly as many above deck. Ship
operators often pile cargo six or seven stories tall. "The temptation is to pile
it like a hay wagon," says Charles Cushing, a marine architect in New York.
Still, most of the megaships are built with a streamlined keel that allows
them to reach nearly 30 miles an hour (compared with 40 mph for an aircraft
carrier) and cross the Pacific Ocean in 12 days.
Ports are scrambling to handle the gargantuan ships. SSA Terminals, which
loads and unloads ships in Long Beach, has used as many as six or seven cranes
-- double the normal number -- on the megaships.
But there is so much cargo that crane operators can work at one hatch for an
entire eight-hour shift, says John DiBernardo, an SSA vice president. To keep up
with the growing ships, Long Beach Container Terminal has welded steel beams
into the legs of its cranes to increase their height.
The Long Beach port plans to spend $800 million to replace the Gerald Desmond
Bridge with a taller version. On Oct. 22, Panamanian voters are expected to
approve a $5.5 billion plan to lengthen, widen and deepen the canal enough so it
can accommodate most big container ships.
"Ports have to enlarge to stay in the game," says Wilson Lacy, maritime
director at the Oakland, Calif., port, which is investing $1.6 billion in
expanded terminals, deeper channels and new equipment for large ships. Many
older ports in the U.S. and Europe are hemmed in by urban sprawl and have little
room to grow.
Meanwhile, shipping lines are trying to outdo each other with ever-bigger
vessels. In August, Maersk launched its 1,300-foot-long Emma Maersk, calling it
the largest container ship ever built. A month later, CMA CGM, based in
Marseille, France, and the Hugo's owner, announced a $1.2 billion order for
eight new ships that can each carry 11,400 20-foot-long containers -- about 4%
more than the Emma Maersk's official capacity.
How big container ships will be years from now "is as big as your
imagination," Mr. Cushing says.
Until port infrastructures catch up, expect many more tight squeezes. John
Ochs, managing director of Maersk's APM Terminals container-terminal operation
in Los Angeles, recalls driving across a bridge on his way to work one recent
morning as a giant ship was docking below.
"I saw this monster sliding under me," he says. "I said: 'I hope they have
Vaseline.' "