Big box ships are NO Laughing matter

Lua Cheng Eng, former chairman of Singapore-based shipping company Neptune Orient Lines (NOL), has pretty much seen it all. Over his nearly 33 years in NOL and shipping, he has witnessed the advent of containerisation, the rise and fall of the ultra large crude carriers, and the amazing technological shipboard and onshore advances. But one advance the recently retired executive is not sure he wants to see is mega-containerships.

“I am one of those who do not believe in the so-called mega-sized ship. I think there is a limit to so-called economies of scale on size of ships,” he says.

Lua illustrates using the example of the ultra large crude carrier. “You remember that the tankers started with the VLCCs, then ULCCs and then half a million tonnes, and then it died. Today you only see the VLCC, and even the ULCC is very rare. The same will happen with containerships.”

Apart from the limited economies of scale, he believes that the success of the mega-containerships faces another obstacle. “Not all the major ports can take containerships of say 10,000 TEU. So there is a limit in an operational sense.”

He adds: “My personal view is that containerships will stop at 5,000 TEUs to 6,500 TEUs ? as something equivalent to the VLCC.”

NOL itself has six containerships on order, five of which fall within this range. The remaining one is much smaller at 2,468 TEUs. It is also having five tankers of 107,000 dwt and one of 319,000 dwt being built.

These vessels will join NOL?s fleet from this year to 2004. The carrier currently has 81 container vessels, 22 product tankers and 29 crude oil tankers. Most NOL ships fly the Singapore flag.

Singapore Registry

NOL?s support of the

Singapore Registry

of Shipping has been instrumental in developing the registry, adds Lua. He points out that its ships make up about 12% of tonnage under the SRS.

Another area which NOL has helped in the development of the Singapore maritime scene is in the field of technical expertise. “In the course of the growth of our fleet, we have built up the capability here among the Singapore management who are able to work with the yard on design of the ship, the construction and finally the operation of the ship. This expertise was never there before NOL was formed.”

Crew needs

The shipping veteran started life in NOL in the ship management division in September 1969 ? nine months after the company started. In 1978, he took over the chief executive post from Goh Chok Tong, Singapore?s current Prime Minister. Then in 1999, Lua became the group?s chairman.

Among his first tasks on joining NOL was to take delivery of the line?s first owned ship, the Neptune Zircon, in late 1969. His voyage home on the secondhand Hansa Lines vessel turned out to be a stomach churning one.

“I sailed on the ship for seven days from Karachi in ballast, and I was seasick for seven days.”

Seasickness aside, Lua recalls the massive manpower needs of ships back then: “When the company got its first ship, we had around 50-52 crew members on an 18,000t cargo ship. Of the 50 or so onboard, there were four so-called firemen, four greasers. And you had engineers working three shifts a day throughout 24 hours.”

Since then, the number of crew required to run a ship has been whittled down significantly. One major reason has been the great strides made in ship engine technology.

“Today the ship may be 50,000t and the engine room doesn?t have greasers anymore. You don?t have the firemen any more and the crew is down to 21-22. So there has been a major change in the engine room.”

Lua reckons that the industry has reached the optimal level of crew size, which now averages between 18 and 21.