Larger ships into West Africa - Opportunities and potential challenges.

West African ports are witnessing an influx of larger container vessels, a trend that began more than a decade ago, between 2011 and 2014 with the introduction of the West Africa Max vessels. These giants [back then], averaging 255 meters in length and boasting a TEU capacity of around 4,500 units, marked the beginning of a new era. The game-changer, however, was the opening of the state-of-the-art terminal in Lomé, Togo (Lomé Container Terminal) . This paved the way for shipping giant MSC to introduce even larger vessels, ranging from 9,000 to 13,000 TEU and measuring up to 367 meters in length.

Fast forward to today, and we’re in the midst of another maritime evolution. Ports like Tema, Lekki, and Abidjan have undergone significant upgrades, positioning themselves as hubs for these larger vessels. During the first six weeks of 2024 alone, we’ve seen vessels of 366 meters in length calling ports such as Pointe-Noire, Abidjan, Tema, and Lekki. This does not appear to be a temporary deployment due to the Red Sea situation; it’s seemingly indicative of a structural shift in the region’s maritime networks. So, who benefits from this shift?

Shipping lines stand to gain significantly from deploying larger vessels. They enjoy economies of scale and potentially better Carbon Intensity Indicator (CII) ratings, aligning with industry-wide sustainability goals. Moreover, the move towards larger vessels complements the industry’s transition towards selling comprehensive logistics services, enhancing overall service reliability.

But the benefits aren’t limited to shipping lines. Ports and terminal operators equipped to handle larger vessels become more competitive and attractive to global trade networks. With improved infrastructure and operational capabilities, these ports become crucial nodes in facilitating smoother cargo flows and bolstering regional connectivity. Ports can expect more revenue on that charges that are connected to the size of the ships.

However, it’s crucial to acknowledge the potential challenges associated with this transformative trend. Congestion is a primary concern, as the increased volume of cargo can strain existing infrastructure and lead to bottlenecks in the operation of container terminals. The introduction of larger vessels also puts pressure on the port workforce. Port pilot must be trained. Skilled labor must be sourced to handle peak in demand. For the container terminal operator it may imply the complete review of the yard management processes and planning in order to cater for potentials surges in inbound volumes. Landside equipments (Terminal tractors, RTGs, Reach Stakers etc...) must be ready to follow the pace of the extra shore cranes solicited by the larger ships. Eventually specialized equipments may be required in order to meet productivity goals.

It’s also important to note that larger vessels don’t inherently stimulate market growth. The demand for shipping is a derived demand, meaning it is not generated in isolation but is derived from the demand for other goods and services transported by sea. While larger vessels offer cost-saving opportunities for shipping lines, the extent to which these savings translate into increased trade volumes depends on numerous external factors.

The introduction of larger container vessels in West African ports marks a significant stride forward and opens up new possibilities. Primary winners in this move are the shipping lines through economies of scale. It’s crucial to manage this shift with prudence and accountability. By addressing hurdles such as congestion, workforce demands, and market fluctuations, port stakeholders can effectively steer this transition, ensuring that West African ports continue to play a pivotal role in regional growth and prosperity. The keys to success will be collaboration and innovation. Stakeholders must join forces to tackle challenges related to infrastructure enhancement, operational efficiency, and environmental sustainability. We foresee more ports, following in the footsteps of Lomé, Tema, Lekki, Pointe-Noire and Abidjan, welcoming larger container vessels and harnessing them as engines for growth in the near future.