RLL Container Report - 03 September 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 03 September 2014
Quo vadis? (Where are you going?).
As Maersk takes delivery of its eleventh 18,270-teu vessel, Merete Maersk, so its partner, Mediterranean Shipping Company, is negotiating a long-term charter for five Triple E container vessels. MSC plans to include these new 18,000 teu ships in the 2M alliance with the Danes. Costing some USD 150 million, a Triple E vessel does not come cheap but the these giant vessels should save the lines billions of dollars in operating costs thanks, in part, to their fuel-efficient engines. The Merete Maersk follows the Mayview Maersk, delivered in July. The 12th unit in the series, Mogens Maersk, is scheduled for delivery in mid-September, after which the main Asia-Europe service will deploy a full fleet of 18,270 TEU ships. Next year, Maersk will take delivery of a further eight Triple E class ships.
The International Monetary Fund’s World Economic Outlook forecasts growth in the international trade of goods of 4.3% in 2014, and 5.2% - 5.8% until 2019. In 2013, global container throughput reached 650 million teu and by 2020, throughput is projected to rise to 985 million teu. This steady growth is reflected in the throughput of the world’s biggest container ports. Leading the field for the fourth year in a row is Shanghai, which handled 33,733 million teu, representing a 3.8% gain on the previous year. In second place came Singapore with 32,240,000 teu, a rise of 3.1%. This means that the world’s leading port is adding over one million teu per annum, while Singapore was only 20,000 short of that magic number. This explains why Some European ports such as Rotterdam and Hamburg experienced problems during the summer holidays in coping with the influx of containers from Asia.
The situation in North Continental ports, however, should improve as facilities are upgraded: Rotterdam’s European Container Terminals have just announced that they have completed the installation of five new quay cranes, which will speed up unloading and loading of the giant container vessels. Further down the North Sea coast, DP World has acquired Euroports’ 66% share in Trilogiport, Liège Port’s new tri-modal container terminal, which serves road, rail and barge traffic. Trilogiport is located upstream from four major North Sea ports (Antwerp, Zeebrugge, Rotterdam and Dunkirk) and is situated at the centre of a market of 56 million consumers. Hamburg also added new cranes and is now waiting on a court decision regarding the dredging of the Elbe. In the meantime, plans have been approved to build a tunnel under the Elbe to the North-West of the Hansestadt, which will greatly ease traffic congestion around the North German port.
At present, however, the major logistical concern for Russian and European transport industries is the same as Saint Peter posed two millennia ago: Quo vadis? Do the current political problems mean a reduction in containerised transport, or a sharp rise in demand as new, overseas markets open up? In the first half of the year, the volume of containers on the RZD network rose by 6.9% to 1.57 million teu. Critically, the biggest rise was seen in the number of laden export units, which increased by an impressive 12.2%. Also, domestic container shipments were up by 11.1%. These rates of growth tend to suggest that the container market in Russia is about to take off as shippers discover the full benefits of intermodal transport.
Of course, such rapid growth brings its own problems: the Far East Division of RZD reports a shortage of container platforms and has suggested, as an interim measure, that containers be transported in open wagons that would normally transport bulk cargoes. It is not clear from the press release if these measures relate only to empty containers or also to fully-laden units. In the first seven months of the year, Russian ports processed 3.13 million teu. Of these, over 830,000 teu were classified as empty exports units. In other words, very second export container being carried by RZD to the ports carries no cargo whatsoever.
And yet, the major Russia exporters seem intent on shifting ever more of their products from conventional rail wagons to containers. In the first half of this year, the volume of chemical products transported by container rose by 8.7% to 170,000 teu. Paper products increased by an impressive 20% to 129,100 teu, while forestry products in general added an extra 17.8%. These are impressive rates of growth by any standard and mark a significant modal shift from conventional to containerised shipments. It then becomes a simple matter of matching the empty export container flows with the requirements of the chemical, forestry and other traditional Russian industries. A variation of the highly popular “Uber” software that matches passengers with available space in private cars should provide Russian industry with a simple and efficient method of matching container with cargo.
Indeed, Russia may need to find such a solution rather quickly. It is calculated that Russia will have to source 2.2 million tons of fruit and vegetables, which it previously imported from the EU. This is the equivalent of 105,000 truck runs per season, much of which was transported in European refrigerated or insulated vehicles. The replacement imports from North Africa, S E Asia and S America will be landed at Russian ports and will have to be distributed quickly over long distances to markets in Western Russia, the Urals and Siberia. This will be a major logistical undertaking even for Russian Railways.
John Keir, Ross Learmont Ltd.
03 September 2014
Copyright ©, 2014, John Keir