RLL Container Report - 16 August 2017
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 16 August 2017
The tale of the tortoise and the hare
According to China Daily, COSCO plans to acquire no less than 14 ultra-large box carriers, six of which will be capable of transporting 21,000 teu on the prime route between the Far East and Europe. The vessels will be built in Shanghai and the price tag for the ultra-large carriers with leave little change from USD 160 million. The first container carrier will come down the slipway next year and its arrival will speed up the global shift from bulk to boxships.
If we look at the soya bean market, we note a move towards the containerisation of this traditional bulk cargo. Some of the smaller producers cannot fill a breakbulk vessels and instead they take advantage of the large number of empty, return containers to supply small and medium importers. At the same time, the ready availability of empty containers across Europe and North America eliminates the need to provide specialist hopper railcars for the inland transport leg to the ports. In the USA, the laden containers are delivered to the main East and West Coast ports, which are now regularly receiving 13,000 teu vessels with an increased slot capacity available on the return leg. Receivers in Asia and other regions can therefore minimise their outlay by ordering smaller volumes but on a more regular basis. As these larger box vessels take over the trade, the delivery time from the farm in N America to the receiver in Asia will come down from 4 months to 4 weeks. Much to the delight of all involved in the trade, containerisation is allowing the buyers in Asia to deal directly with suppliers on the other side of the globe.
Coincidentally, the shift towards containerisation on the traditional deep-sea routes is also benefiting rail operators serving the Far East markets from Western Europe and Russia. The block trains on the Transiberian Railway may not be able to offer the large box capacity available on a 21,000 teu vessels, but the rail operators can avail themselves of a regular number of train departures serving a wide range of destinations in the Urals, Western Siberia, Central Asia, China and the Far East. While the 21,000 teu behemoths are keeping their speed down in order to save on fuel, the container block trains are increasingly moving along electrified railways and are improving the logistics in order to shave another day or more off the transit time between the major intermodal hubs in Europe and Asia.
One of the major upgrades in rail transport is currently being drawn up in Moscow, where new and much larger intermodal freight terminals will be capable of handling far greater volumes of boxes and cargoes from the Russian capital and surrounding regions. Products, including agricultural exports, can be containerised and loaded at the new terminals into 40’ HC containers, which are currently returning empty on the East-bound leg of the journey through Central Asia and Western China. At the same time, the container hubs in Western Russia can also offer improved block train services south via the Caucasus and on through Iran to the ports on the Persian Gulf. From there, it is a relatively short journey to the rapidly developing countries of East Africa, which have constructed modern rail networks that are slowly but surely edging their way into the heart of the continent.
John Keir, Ross Learmont Ltd.
16 August 2017
Copyright ©, 2017, John Keir