Fleet Maritime Winter 2012

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fleetMaritime: IRISH SHIPPING & FREIGHT Compiled by Howard Knott Edited by Jarlath Sweeney email: maritime@fleet.ie

Volume 7, No. 4 Winter 2012

The empty container problem

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s has been mentioned in the columns of ‘Fleet Maritime’ previously, the issue of availability of the empty containers that are needed for the development of Irish exports is becoming more pressing. The Irish Maritime Development Office, (IMDO) highlighted the issue in its “Transport Economist” document published in the Spring and this, together with many exporter's bad experiences in this matter, has prompted the Irish Exporters Association (IEA), a number of Shipping Lines that operate on the short sea services, as well as others whose focus is on deep-sea, and Ports to look into the matter and try to find solutions.

During the summer the Port of Liverpool and the Scottish Transport Development Body, Sestrans, became involved. In Scotland there is a specific issue with a rapid growth in worldwide demand for Scotch Whisky. This is best shipped in 20ft containers into which the cases can be packed tightly and the load made completely secure, but 20ft containers are few and far between. More recently the European Shippers Council (ESC) has become involved in the discussions.

Ever since the start of the container revolution in the 1960s, Irish exporters had enjoyed a situation in which the number of containers of all sorts and sizes coming into Irish Ports with imported goods significantly outnumbered the demand for boxes for use in export cargo. This situation led to shipping lines being very keen to get cargo for as many boxes as possible and they offered not only low door to door shipping rates, but also did not have to charge a container positioning fee.

When the Celtic Tiger hit the wall in 2007 the number of laden containers, particularly from the Far East and other deep-sea markets, quickly dropped off. However, it was the closure of manufacturing at Dell Computers in Limerick that really tipped the balance. Dell had been bringing in over 70 boxes with components every week and this traffic not only supported container services running into Cork, Waterford and, for a period, Foynes but also meant that a significant range of containers was available to exporters south of a line running from Wicklow to Galway. In almost all cases the cost of haulage to Limerick and back to

shipped into and out of Ireland together with Britain north of the line from deep-sea Ports was roughly in balance.

local Port was already covered by the shipper of the import cargo, so that the extra cost of positioning to the Exporter was minimal.

A clear indication of the current problem is the case of one Line that is shipping each week on a vessel that has come from Benelux to Dublin before going on to Cork, carrying up to 60 empty containers from Dublin to Cork. Because these containers belong to other companies, the Line can earn reasonable revenue from this exercise but, of course, the issue is whether or not the Munster based exporter will pay all or part of this additional cost.

Another case in point is a Line moving substantial volumes of its own containers on its vessel, from Dublin to Waterford to support regional exporters.

A further reported case is the deep-sea Line whose Dublin office was informed that it could not book any more cargo in 20ft containers to come into an Irish Port. If the importer really wanted the cargo shipped it would come in 40ft container adding substantially to the cost. Another curious fact is that a map of Britain and Ireland was divided with a line running from Bristol to the Humber Estuary; you find that the current number of containers being

So, what solutions suggest themselves so far?

One would be to operate the longest possible container train from Dublin Port to Cork. If the empty containers moving southbound can be combined with laden containers coming into Cork Port but with cargo destined for Dublin, then the cost could be competitive with shipping coastwise, and container flow could be much more regular. More might be done to exploit the available capacity on feeder and Short Sea vessels that call to Liverpool before coming to Irish Ports and on vessels that call to Dublin before sailing with their own cargo for a Scottish Port. In the US the body co-ordinating grain exports has developed a web based system that enables Shipping Lines to post the delivery locations and times for import cargo during the coming week. This enables the potential exporter to source the nearest containers and work around the availability date so as to minimise the transport cost. Some such system may be worth consideration here but work will also have to be done on the methods in which the Shipping Lines, who own the containers, impose substantial hand-over charges on merchants of forwarders that wish to do their own haulage.

One other problem that is remarkably common is that the Exporters do not help themselves as, very often, situations arise that the side of the house that brings in components and other materials does not communicate with the export side. It quite often happens that a container from Shipping Line “X” is discharged and goes away empty, only to meet another one from the same Line coming into the plant empty to pick up an export load.

Even more common is the failure of the exporter to control the total shipping, either directly, or through his Freight Forwarder, by using the same Shipping Line for both imports and exports, and thus backloading incoming containers.

This empty container work is very much on-going and has been taken into the “best practice” work activity package of the EU backed Weastflows project. It is important that all views and opinions are heard and you are urged to come back to howard@ fleet.ie with any thoughts.

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EU seeks to address Ports Policy

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t a Conference called by the EU Commission that took place in Brussels in September, the Commission VicePresident and Commissioner for Transport, Slim Kallas, set out a number of concerns that the Commission has in devising a Ports policy that allows Ports within the Community to compete and operate in a fair and efficient way.

While the Commission and most organisations that were involved in the consultations on Ports policy felt that there would be overall trade growth in both freight and passenger movement through Ports, Commissioner Kallas said, “We have to ask where that likely growth and demand will leave European Ports in 15 to 20 years time. Ships are gett ing larger and more sophisticated. Ports face serious challenges in terms of productivity, investment needs, sustainability, human resources as well as integration with cities and regions. They will have to adapt a great deal to cope with this extra pressure. We also saw from our consultation that not everybody agrees on whether our Ports are ready to face these challenges. Ports, and particularly the major core Ports in the transEuropean transport network (TEN-T) are not just the concern of their local community, but their hinterland extends far into the rest of the

country. They also often act as major gateways for the economies of the neighbouring countries as well ..... Today’s many bott lenecks are often due to low efficiency and sometimes due to restrictive labour and other non-competitive regimes within the Port. It is vitally important that Ports are able to compete efficiently and globally against rival Ports. That means improving their rail access, connecting motorways, upgrading rivers and inland waterways that feed into Ports, just to name a few areas.”

He went on to say, “I believe that the time has come to establish a more coherent Ports policy and a real strategic vision for EU Ports. It is also time to give some legal certainty to Port operators and service providers, not least as incentives to attract long-term investments.” The Commissioner spoke about the huge range of business models existing across the Community and the need to rationalise these so as to increase transparency and competition. He also spoke of the need for an examination of the issue of fi nancial transparency. Under today’s EU rules, many publicly owned Ports do not have to keep separate accounts between their economic activities. Th is makes it hard to follow the funding streams and ensure that there is no breach of State aid rules. He made it clear that public funding should not be used to distort Port

charges, which should be set out in a clear and non-discriminatory way.

While the Commissioner’s statement does not, of itself, add up to an EU Ports policy, it is a fi rst indication of the direction in which things are going. Minister of Transport, Tourism and Sport, Leo Varadkar T.D. is expected to reveal his new Ports policy within the coming weeks and it will now be able to benchmark against the Commission’s view. It is also interesting to note the Commissioner’s reference to the TEN-T and “Core Ports”. At present, Dublin is the only Port on the island of Ireland that is a “Core Port”.

New deal for Irish Cruise passengers

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ork based travel agency, Lee Travel has announced a new co-operation agreement w ith Royal Caribbean Cruise Line under which over 200 passengers will join Scandinavian cruises in Cork during the summer of 2013.

Lee Travel is a long-time supporter of the cruise industry and has offered a wide range of cruises, many to worldwide destinations, but also short voyages from, for example, Southampton to Cork designed to give potential cruise holidaymakers a taste of life on board the massive vessels. Speaking about the Norway cruise initiative, Lee Travel’s Managing Director, Declan O’Connell said, “We have been working on it since 2008 and there has been a lot of toing and fro-ing. We could see all these great cruise liners coming in but nobody could get

Royal Caribbean is using their “Independence of the Seas” which has a crew of 1360 on board and capacity to host 4375 passengers for the Norwegian cruise.

The itinerary includes the Norwegian West Coast as well as the capital, Oslo, before sailing to Zeebrugge and fi nishing the cruise at Southampton.

on board them. I am very confident that this will take off .”

Plans are also afoot for the development of cruises operating out of Dublin and Cork where passengers will come from UK and even US cities to join the vessel at the Irish Port. The cruise business, both on board the larger vessels such as “Independence of the Seas” and the boutique liners that can call at small Ports and anchorages, is developing rapidly despite the overall recession, and all Irish Ports report record figures for visitors to Ireland in 2012.

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CLdN/Cobelfret re-schedules Irish services

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ecently appointed Line Representative for the Luxembourg based CLdN/ Cleary has advised VolumeCobelfret, 5, No. 4 Gerry Winter 2010 Fleet Maritime of recent changes to the schedules of the Line’s services to and from Dublin. Gerry Cleary is a veteran of forwarding and agency company IWT. The new schedule offers three sailing each week on the Zeebrugge/Dublin route with departures from the Belgian Port on Wednesday, Thursday and Friday. The Thursday sailing is operated by the Lo-Lo vessel, ‘Arx’, which calls to the River Seine Port of Radicatel en route to Dublin, the other two sailings are covered by the Company’s

The Rotterdam service operates twice weekly in each direction with sailings from Rotterdam on Tuesday and Friday evenings, arriving in Dublin on Thursday and Sunday respectively.

The Thursday evening arrival vessel sails from Dublin at noon on Friday, arriving, Rotterdam on Sunday while the other vessel turns round in Dublin on Sunday, reaching the Dutch Port on Tuesday morning. large Con-Ro vessels. Two vessels sail from Dublin on Sunday evening while the third sails late on Tuesday reaching Zeebrugge on Thursday afternoon.

The ‘Arx’ sails from Radicatel with French originating cargo late on Friday evening reaching Dublin on Sunday morning. Sailing time from Dublin to Radicatel is long, leaving Sunday night and reaching Radicatel Friday, noon.

DFDS/Louis Dreyfus Armateurs agreement completed

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FDS and Louis Dreyfus Armateurs (LDA) have completed a joint venture agreement and formed a new company combining DFDS’ existing Channel operations and LD Lines’ ferry operations. DFDS will own 82% of the new Company and the Company expects that the new venture will add around €12 million to their fourth quarter revenue in 2012.

The new Company combines the existing DFDS routes out of Dover to Calais and to Dunkirk with the LD Lines Portsmouth/Le Havre and Newhaven/Dieppe routes in the

English Channel. It will also take over the LD Lines Marseille/Tunis route. The LD Lines route linking Nantes and Gijon on the North Spanish Coast has not been included in the joint venture; it is currently in receipt of European subvention under the Marco Polo scheme as it seeks to divert truck traffic away from congested Trans Pyrenees routes onto the ferry.

DFDS Seaways recently appointed Declan Cleary to the new post of Sales Manager, Ireland. Declan comes to the Line with years of experience with P & O Ferries and Norfolk Lines as well as having had a spell with transport operator, Caff rey International. His role is to market the full suite of DFDS Ro-Ro services covering the North Sea, Baltic and the crosschannel and other new routes. At present DFDS do not have any Ro-Ro connections to Irish Ports so routes all traffic is landbridged across Britain.

the scale of planned job losses and reductions in overall income as the Line struggles in competition on all of its routes. The arrival of the Eurotunnel backed, ‘My Ferry’ on the Dover Strait will further add to this pressure.

Industrial unrest has also spread to the Port of Le Havre, France’s second largest container shipping Port. Trade Unions fear that the Socialist Government’s efforts to plug a €37 billion hole in the public fi nances will lead to more job cuts. Ferry services to Portsmouth have not been affected by this strike action.

An indication of the ever tougher business environment on English Channel route is the recent industrial difficulties that stopped Britt any Ferries’ services for ten days. Unions within the Company are very concerned about

BIM begins Public Consultation on huge fish farm

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ublic consultation on BIM’s planned salmon fish farm to be built in Galway Bay close to the Aran Islands has just commenced. Jason Whooley, BIM’s CEO has said that the farm at full production should have an annual output of 15,000 tonnes and would in one step double Ireland’s farm salmon production. He expects full output to be reached within six years.

The promoters have indicated that Rossaveal is the most likely port through which service

vessels would operate and that transport and allied service would account for up to 100 jobs.

BIM will not operate the farm itself but will licence a qualified operator to do so for a licence period. Th is means that the Irish State will retain control of the asset that is the fi sh farm and be in a position to ensure that all quality standards both in operation and in the output are met.

Irish farmed salmon, both whole and processed is mainly an export product and the additional output from the new fi sh farm will provide

welcome extra traffic for reefer trailer operators running to Europe and to airfreight out of Shannon.

In the same week that this Public Consultation was announced the decision was publicly announced that Galway would not be bidding to host a stopover of the next Volvo Ocean Race. Th is news came despite the huge success both on and off the water of the race fi nale in Galway in July.

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Massive Killarney built Cranes for Melbourne

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iebherr Container Cranes has secured an order for one of the largest Ship-toshore container cranes ever built from DP World, the operator of the Container Terminal at Melbourne Port, Australia. The crane’s outreach will be 50 metres enabling loading or discharge of two containers at a time and these can be delivered 25 metres onto the quayside.

Speaking at the announcement of the sale, Pat O’Leary, Liebherr’s Managing Director said: “Liebherr ship-to-shore cranes can be found throughout Australasia and South-East Asia, particularly New Zealand and the Philippines and we are thrilled to be back in Australia. In 2010 we supplied DP World in Manila with two ship-to-shore cranes and we welcome the opportunity to

He went on to say, "Liebherr Container Cranes have developed a reputation for reliability, longevity, productivity and low lifetime costs because that is essential in today’s Port."

Another recent major sales success for the Kerry based Liebherr was the order for a straddle carrier that can stack containers three high from Peel Ports at Liverpool. The unit chosen also provides extendable twin-lift spreader capacity.

extend our presence in the region by supplying a Liebherr Post-Panamax crane to DP World at Melbourne, Australia’s largest container Port.”

Liebherr Cranes are shipped from the Killarney plant in pieces up to 50 metres long, by road to Fenit, from where they are shipped to destination Port by chartered vessel. The charters are arranged and loading supervised

by Burke Shipping.

Greek Ship-owners come to the aid of German Banks

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ver 100 German shipping based investment funds have shut down as the long-simmering crisis in global container shipping comes to a head and Consultants fear that a further 800 such funds may follow suit. The basic problem is that the funds purchased ships when the markets were booming and now many of the vessels are laid up or operating at a serious loss.

Clarkson’s Shipping Intelligence Weekly explained the issue, “As pressure builds, owners are forced to lay up ships and, with no cash flow, they can’t pay their bankers. As their ships are forced onto the market, prices spiral down.

Well heeled companies snap up the good ones

and the rest go for scrap.”

The odd twist to the story is that Greek Shipowners are the ones quietly snapping up the bargains from distressed German companies.

Industry paper, Lloyds list added, “The Greeks are sitt ing on a pile of cash. They are in their own special cocoon completely removed from Greece’s political troubles. They played their cards really well during the boom, selling ships for a profit at the top of the cycle and they are now buying them back at a fraction of the price.”

One consultant looking at the issue reports that German shipping experts say that two thirds of

the country’s marine fleet is in financial distress.

If the crisis drags on much longer, the Greeks may leapfrog ahead to become world leaders in container shipping. The irony of prudent Greeks cleaning up after a reckless debt spree by the Germans is not lost on anybody.

A further indication of the tight fi nancial situation of the worlds container shipping industry is the statistic that container leasing companies are expected to buy two thirds of the new containers ordered in 2012, well above the traditional levels of about 45% of world orders.

The leasing companies are also fi nding very strong investment interest in containers from both public and private investors.

IWT’s green Crusade takes a further step forward

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nternational Warehousing and Transport (IWT), which operates rail freight operations linking Ballina with Dublin Port, estimated to save up to five and a half million road kilometres and reduce CO2 emissions by up to 2,750 tonnes in 2012, has chosen Customs Matters, AEO designed software which is branded “myCustoms” to look after its customs and trade requirements.

committed to using best in class soft ware to ensure efficiency and compliance.” myCustoms soft ware reduces carbon footprint for all those involved in international trade by eliminating paper in the customs clearance process, its platform is ‘cloud hosted’ in an energy efficient environment and allows customers in Ireland and in the UK complete all customs formalities on line.

Derek D’Arcy, a Director at IWT said at the launch of the new agreement which took place at the Common User rail terminal in Dublin Port, “As an AEO company we are always innovating and our rail service is testament to this. We are

Derek D’Arcy, IWT and Stephen Tracey, CEO, CustomsMatt ers.

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