Economies and Diseconomies of Scale in Container Shipping
Like many forms of transportation, container shipping benefits from economies of scale in maritime shipping, transshipment and inland transportation. The rationale of maritime container shipping companies to have larger ships becomes obvious when the benefits, in terms of lower costs per TEU, increase with the capacity of ships. There is thus a powerful trend to increase the size of ships, but this may lead to diseconomies to other components of container shipping.
For port terminals the growth in ship capacity comes with increasing problems to cope with large amounts of containers to be transshipped over short periods of time as shipping companies want to reduce their port time as much as possible (improved ship asset utilization and keeping up with schedule integrity). Larger cranes and larger quantities of land for container operations, namely temporary warehousing on container yards, may become prohibitive, triggering diseconomies of scale to be assumed by port authorities and terminal operators.
For inland transportation congestion growing capacity, such as more trucks converging towards terminal gates, leads to diseconomies. Because of technical innovations and functional changes in inland transportation, such as using rail instead of trucking to move containers from or to terminals, it is unclear what is the effective capacity beyond which diseconomies of scale are achieved. The fundamental point is that diseconomies are a challenge that impacts several segments of the transport chain.