RLL Container Report – 18 December 2013

From: John Keir, Ross Learmont Ltd

Email: john.keir@teia.com

Date: 18 December 2013

Vladivostok keeps rolling on, recording its highest ever throughput of containers in November, when the port handled 46,463 teu. Furthermore, during the period from June to October, the Far East port handled 213,076 teu, which is 13% more than in the previous 5 months. Containerised cargoes now constitute 63% of the total cargo passing through Vladivostok terminal. This makes the Far East region the fastest growing container market in Russia clocking up a 15.6% increase, which somewhat overshadows the 0.1% achieved in the Baltic basin.

Following hard on the heels of Gdansk, PKT (First Container Terminal) in St Petersburg recorded its millionth container in December when YMLU814391-1 was discharged from MV Elan. As is its wont,

the Port of Kaliningrad continues to plough a lone furrow, reporting a highly creditable 15.4% rise in general cargo to 3.8 million tons for the eleven moths to November but at the same time registering a 22.6% fall in container handlings. China, Korea and Belarus have been sounded out as potential investors for the proposed port facility to be built at Yantar in the Kaliningrad region. In order to encourage investors to sign up, the port complex may be designated as a Special Economic Zone. The budget for the initial phase of development covering the period up to 2016 has been set at RUB 23 Billion.

In Riga, Uralchem opened its new fertiliser terminal located in the centre of the city port complex. Costing Euro 45 million, the terminal has a capacity of 2 million tons per annum. While much of the Uralchem cargo is shipped by bulk carriers, a small but increasing volume is being containerised. Port developments are also under discussion in Belgium, where MSC has officially requested the Antwerp Port Authority to expand the Deurganck dock in order to accommodate vessels with a capacity of 16 to 18,000 teu. Currently, MSC uses a terminal, which can only be accessed via a lock system. The advantage of the Deurganck dock is that it would give MSC and other P3 members unfettered access to the open waters of the North Sea. If you study a map of the region, you will note that the proposed terminal is only a short distance from the border to the Netherlands. 

The month of December kicked off with a number of deals on the purchase and sale of new and used container equipment. The Taiwanese shipping line, Wan Hai took delivery of 10,000 dry cargo containers from Chinese factories. The Taipei-based line is taking a mix of 20’ and 40’ HC units equating to 12,700 teu, for which they paid the princely sum of USD 41.4 million. The price of a 40’HC is given as USD 3,269, which would mean that a 20’ DC cost about USD 2,050. Wan Haiconcluded their purchase of new equipment just as the world’s second biggest container manufacturer, Singamas Container Holdings issued a profit warning caused by a decline in container demand leading to a fall in the average sale price. Clearly, as Wan Hi has demonstrated, now is a good time to place an order for new equipment.  

The same week, Wan Hai’s compatriots, Yang Ming announced that they had sold an unspecified number of boxes to Textainer, a leading container lessor. Yang Ming is planning to replenish is working capital by selling assets. As part of the deal, Textainer will lease back the equipment to Yang Ming, though it s not clear if this will be on a long-term or master lease arrangement. As theses are “second-and” units, the number of teu involved in this USD 47 million deal will be much higher than the 12, 700 teu which Wan Hai acquired new ex-works for USD 41 million. In December, Transcontainer is taking delivery of 400 containers, for which they are paying RBL 76 million to Tekhprojektinvest. This suggests they are special units rather than 40’ HC units.

Plans have been announced to construct two new container hubs at either end of the Silk Route. The western city of Xian will be developed into a major regional logistics centre serving primarily the Shaanxi Province. This hinterland hub facility will co-operate with a number of eastern coastal ports and will act as a processing centre for many of the local manufacturers. News about the Xian facility comes as China's economy shows signs of picking up after its growth rate slowed in the first half of the year. The economy grew 7.8% in the three months to September. The improvement has been fuelled in part by a recovery in demand for Chinese exports in key markets such as the US and European Union. At the western end of the route, Germany is proposing to develop a major inland rail hub at Lehrte just north of Hannover. Costing some Euro 100 million, the new Mega-Hub is not only conveniently located for German industry but also provides easy access to the container ports of Hamburg, Bremerhaven as well as Rotterdam and Antwerp.

So far this year, container services on Caspian Sea routes experienced a 28.9% drop to record a modest total of 5,304 teu. However, the Caspian container operators may receive a fillip from an unlikely source. French car makers are discussing with Iranian authorities the possible resumption  of production at a number of plants in Teheran, Mashad and Tabriz. Iran had been a very important  market for Renault and Peugeot and the French are keen to re-start co-operation as soon as circumstances allow. Previously, Renault supplied CKD kits from its plant in Romania and the company may opt to supplement these with parts from its Russian facilities.