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
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
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.