12 Марта 2014

From: John Keir, Ross Learmont Ltd
Email: john.keir@telia.com
Date: 12 March 2014

Ja, vi elsker dette landet,
som det stiger frem,
furet, varbitt over vannet,
med de tusen hjem

"Ja, vi elsker dette landet" (Norwegian national Anthemn)

Norway is blessed with a long, spectacular and ice-free coastline. Its stunningly attractive fjords are celebrated in song and are visited each year by hundreds of cruise vessels. Unfortunately, these very same fjords make it impossible to run a railway line or main highway from the south to the north of the country. Instead, Norway has to call upon the assistance of its neighbours to provide road and rail access to ports such as Narvik, Tromso and Kirkenes. For example, regular freight services from the capital, Oslo to Narvik make use of the Swedish rail network as far as Kiruna before making a dash over the border (and back out of the European Union) to the deep water port at Narvik. In return, the Norwegians allow the Swedes to run regular iron ore trains from Northern Sweden to Narvik, from where this valuable cargo is distributed all over the globe.

In a well-coordinated move, Hamburg Sud is starting to phase into the South American trade its new 9,800 teu vessels. The first of seven such vessels, each equipped with no less than 2.100 reefer plugs, is being deployed on the main box route between the East Coast of South America and Europa. The new vessels replace ships with a capacity of only 7,200 teu and 1,600 reefer plugs. Most of the major European lines charter slots from Hamburg-Sud on this route. Food importers in the Far East are turning away from bulk carriers to containers to transport agricultural cargoes. Traditionally, the transport of agricultural commodities has been the domain of bulk vessels with a capacity of 60,000 to 70,000 tons. However, bulk vessels now face a two-pronged attack. Firstly, Asian importers can use the new container carriers to transport smaller but sizeable volumes more quickly. Secondly, the overall costs of shipping by container is falling as slot capacity increases.

Now, the Republic of Finland wants to copy the Swedes and is negotiating with the Kingdom of Norway on a rail line from ore deposits round Rovaniemi to the port of Kirkenes with its ice-free access to the Barents Sea and from there out into the wider world. The proposed route will be 550 km long with only 50 km in Norway but the Norwegians contributing Euro 800 of the projected final bill of Euro 3 Billion. Of course, a broad-gauge line from Kirkenes to Finland opens up a whole new transport network stretching all the way through Russia to China and a second corridor straight south through the Baltic states into Central and Southern Europe. Clearly, this would be money well spent by the Norwegians.

Meanwhile 3,300 km due south of Kirkenes, the European Investment Bank is to lend Euro 250 million to finance the upgrading of Hungary’s railway network, which acts as a regional hub in Central Europe. Situated on the Danube at a natural crossroads, railway lines from the capital Budapest radiate out to no less than seven neighbouring countries - Austria, Slovenia, Croatia, Serbia, Romania, Ukraine and Slovakia. The upgrade to Hungarian railways will greatly speed up the integration of recent entrants to the European Union, while at the same time providing improved access to the broad gauge system via Ukraine.

Although general cargoes in Russia show signs of decline, box traffic seems to be holding its own and even growing in certain sectors. In the Far East Region of Russian Railways, for example, container throughput continued to advance in February. The region was on target to carry 375,000 tons of containerised cargo, which represents a 9% increase on the previous year. Fesco also continues to benefit from the growth in box traffic with S E Asia by signing a joint venture with Yenwin International in Shanghai. At the same time, Fesco is about to nominate the lead contractor for its new intermodal terminal complex in the Moscow Region. The complex with an annual capacity for 270,000 teu will be constructed in Mikhnevo, some 50 km from the capital and is scheduled to open in October of next year.

From the North West came news of a new dry port to be established near Gatchina. OOO “Sfera Uslug” is to invest USD 50 to 70 million in a logistics park measuring 120,000 square metres. The complex will act as a dry port and distribution centre for containers arriving from Ust-Luga. On the southern Baltic coast, the Port of Elbląg handled 285,000 tons of bulk cargo in 2013 and plans to increase this to 400,000 tons in the current year. The European Union is providing funds to dredge the harbour to 3 metres and to construct new quays. The Polish Baltic port then plans to operate round-the-clock. There are developments too in the automotive logistics sector, where NYK bolstered its presence in the Kazakh logistics sector. The Japanese operator acquired Tranco, the country´s largest car terminal operator. Last year, car sales in Kazakhstan grew by 70%, as 165,700 new vehicles were snapped up by local customers. Experts reckon the car market could almost double in size. Meanwhile in Tartarstan, RZD Logistics has contracted to supply the Ford car plant in Alabuga with containers carrying CKD for the American auto giant`s joint venture with Sollers. Block trains transport containers to the nearest rail terminal at Tikhonovo, from where the units are supplied on a just-in-time basis to the car assembly plant. The terminal plans to double capacity from its current level of 120 units per day. Ford assembles its Explorer, Kuga, Galaxy, S-MAX, Transit and Tourneo Custom at Alabuga and a second manufacturing plant will open in Naberezhnye Chelny. Ford also started work on a new USD274 million engine plant in Tatarstan – the first passenger car engine plant in the region – which will start production in 2015.

On the other side of the “pond”, the Port of Charleston, South Carolina is profiting from the growth in car production at local plants, as container traffic rises 50% in the past three years. Much of the inbound traffic comes in the form of car parts destined for the assembly plants in North Carolina and Tennessee. After introducing a RapidRail service, the port saw its share of intermodal advance from five to sixteen percent. Of the 145,000 units passing through the terminal in 2013, no less that 85% went by rail. Also, shifting to block trains has allowed shippers to carry heavier export cargoes such as fertilisers. In 2013, global fertilizer production rose by 0.6% to 179 million tons and projections for this year point to a 1.8% rise with global demand topping 182 million tons.

John Keir Ross Learmont Ltd
12 March 2014
Copyright © 2014 John Keir