Daily Operating Expenses for Containerships per TEU


Source: Alphaliner.

Economies of scale in container shipping are achieved by using larger containerships, which reduces unit transport costs because of lower operating costs (measured in dollars per TEU of capacity per day). In the late 1990s, the cutting point was around 4,000 TEU for long distances, but this threshold has been extended to about 8,000 TEU as global trade generated more cargo. It is thus not surprising that maritime shipping companies have introduced larger and larger containerships, particularly over long-distance routes. The fundamental limitation is the capacity of port terminals to handle larger ships since this requires substantial investments in transshipment and port-side facilities.

Depending on the distances at which containers are carried, which is related to trade routes such as transpacific or transatlantic, this will result in different total shipping costs. The Singapore / Rotterdam route, because of the intensity of its traffic, is often used as a frame of reference in container shipping costs. The above figure assumes normal operating speeds and shows that operating costs per TEU decline with larger ship classes. Slow steaming involves lower operating costs per day but adds additional shipping days, particularly over long distances.