How a worldwide shipper acts like a job shop

How is Maersk’s new Triple E class containerships—nearly as long as the Empire State Building is tall—like a job shop?

Forget the fact that, as reported by BusinessWeek, the behemoth is designed to go only 16 knots to save fuel. Sure, heat-capture devices use heat from the massive ship engines to drive secondary turbines, saving fuel a bit. But you also just can’t beat the savings of going slow, not just for the Triple E but for any ship, really. If you need a small quantity of something fast, a container ship isn’t for you.

With all that capacity, the slow-moving ships may work well for companies that need a lot of something, but aren’t necessarily in a hurry. But the demand for this kind of business is incredibly cyclical. And it just so happens that these ships give Maersk some unprecedented levels of capacity.



This latest megaship trend may be the equivalent of a job shop buying machines to build excess capacity. Job shops have highly variable demand, so they need enough machines and perfected processes to ensure rapid response. If you get close to capacity, part flow becomes like stop-and-go traffic, and late orders result. The ships may not go fast en route to port. But for decades to come, these megaships will ensure Maersk can ramp up to meet demand quickly, gobbling up demand during the business cycle’s peaks.

This also reveals another trend: outsourcing fabricating expertise. South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME), the shipyard building Maersk’s behemoths, has worked toward "lean" shipbuilding. Massive modules arrive in massive modules from Chinese heavy fabricators. According to the article, the construction for one ship takes just about a year, and with all the ship construction in progress now, the yard will be churning ships out at the rate of one every six or seven weeks over the next two and a half years.

Discrete-part manufacturers have always outsourced their fabricated components, and today many are outsourcing even more. Fewer contract manufacturers are shipping piece-parts, and more are shipping subassemblies. This now applies even to structural fabrication, where modular components are being fabricated under roof and then shipped. And these days, those modular sections can be shipped from structural fabrication operations anywhere in the world. A building in Chicago may well have a modular section made in the Philippines.

Labor cost enters into this equation, but it’s not just about that. After all, many large structural fabricating operations have become increasingly automated in recent years. A massive beam line doesn’t need many bodies to run it.

Perhaps the overarching need is simplicity. If a fabricator can make life simpler for the customer, he can win the business, be it for brackets, buildings, or the world’s largest containerships.