RLL Container Report - 24 September 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 24 September 2014
The heart of the matter.
The two leading global container ports continue to increase their throughput at a steady pace. In August, Shanghai processed an additional 5.4% to record 3.11 million teu for the month. Following closely behind its Chinese rival, Singapore handled 2.87 million teu, which represents an increase of 1.8% on last August’s total. This steady and inexorable rise in container traffic is forcing European ports to upgrade their terminal facilities to cope with the ever-increasing number of boxes heading West from China and S E Asia. At the same time, shipping lines are looking for modern ports that can offer fast turn-around times and quick access to the markets at the heart of Europe. For this reason, ship owners are focussing their attention on the Adriatic Sea, which penetrates deep into the European continent, providing the shortest maritime route from the Far East via the Suez Canal to the prime European markets. Large commercial and industrial hubs like Vienna, Munich and Milan are located a short journey from container ports that form an arc stretching round the Northern Adriatic from Ravenna in Italy to Rijeka in Croatia.
Of course, the Adriatic is no stranger to this role, as Venice once dominated European trade with the Orient, providing Europe access to spices and silks. But Venice’s stranglehold on the trade led to its downfall as Spanish and Portuguese merchants quickly followed by their Dutch and English rivals, opened up the direct sea routes to the spice islands. Nowadays, Venice is being transformed into one big Hollywood backlot, which each day receives tens of thousands of visitors, many of whom arrive by giant luxury liners that deposit their passengers right in the heart of "Serenissima". This has allowed ports in the former Yugoslavia to carve out a niche market offering a far more mundane service to container operators plying the main trade route from the Orient to Europe.
CMA-CGM joined its partners in the Ocean Three group by calling at the Adriatic port of Rijeka. Along with CSCL and UASC, the French line added the Croatian port to its Asia-Europe, Asia-Mediterranean, transpacific and Asia’s east coast trades through a combination of vessel-sharing, slot exchange and slot charter arrangements. Transit time from Ningbo to the North Adriatic is estimated at 24 days. Earlier this year, Rijeka handled its largest vessel when the 8,500teu CMA CGM Cendrillon made its maiden call at the port on the Phoenician Express service.
However, stiff competition for Rijeka lies just around the bay in the form of Slovenia’s Port of Koper, which can now offer a draught of 14 metres. This allows vessels of up to 10,000 teu to call. At the same time, Koper is investing Euro 240 million in improving facilities, including dredging to a depth of 15 metres. Half of the total investment is earmarked for the container terminal, which should boost the trans-shipment capacity to one million teu by 2020. Another key element in the port’s development will be the construction of 100 metres of new quayside to accommodate expanded rail facilities. The port management has called on the Slovenian government to construct a second rail line from Diavaca to Koper, as the port could reach its maximum capacity within four years. For a glimpse into the future, one need only look to the “Confoederatio Helvetica” or Switzerland.
The Swiss Transport Ministry, BAV reports a steady growth in rail freight on transalpine routes across Switzerland. Volumes climbed by 5.3% year-on-year between January and June to reach 13.5 million tons, with wagonload traffic rising 6.2% and unaccompanied combined transport up 5.4%. The Gotthard route saw a 5.8% increase in volumes and there was a 4.5% rise on the Simplon route. Rail now has a 67.5% share of the Swiss transalpine freight market and this is expected to rise across the region as major tunnelling projects come on stream. By contrast, 71% of the cargo via the Brenner Pass in Austria is still transported by truck. This takes us to the heart of the matter: with container volumes rising at an ever faster rate, cargo has to be shifted off the road on to rail. After discharging at an Adriatic port, the containers can simply be loaded on to block trains to their final destination north of the Alps, where trucks can be used for the “final mile” to the receiver. This way, Europe can continue to import goods from the Shanghai and Singapore without fear of clogging up the road network.
The North Adriatic ports have the added advantage of sitting astride two important TEN-T transport corridors. The first reaches out from Ravenna and Venice, via Slovenia and Croatia up into Central Europe via Poland and on to the Baltic States and Finland. The second corridor originates in Southern Spain and Portugal passing via Lyon and across the North Italian Plain to link with the Adriatic ports before thrusting due east towards Ukraine and Russia. The port of Koper was quick to exploit the transport corridor north to the new and upgraded car plants in Czechoslovakia and Southern Poland. Block trains carrying CKD from Korea depart from the Slovenian port on a regular basis to the Hyundai and KIA assembly plants that lie on either side of the border between the Czech and Slovak lands.
European railways bordering on the Adriatic are also investing heavily to reduce transit times. To the East of Rijeka, Serbia has agreed with Hungary to construct a high-speed rail line linking the Serbian capital, Belgrade with Budapest. Further north, Czech and Slovak railways announced plans to reduce transit times on the route between Prague and the East Slovak city of Kosice by one hour. A new “Pendelino” passenger service will reduce travel time to seven and a half hours at an average speed of 95 km per hour, making it one of the fastest routes in Eastern Europe. From Kosice there are regular container block trains serving the broad-gauge lines stretching into Ukraine and Russia.
In order to consolidate co-operation between the two Adriatic countries, Slovenia and Croatia will re-open the 7.4 km rail line between Svet Rok and Durmanec, which closed in 1994. The Euro 6.6m project involves the reconstruction of four bridges and one tunnel and is expected to be completed in December.
By the way, experts reckon that Westerngrund in Bavaria is the geographical centre of the European Union, while Lithuania can claim to be at the heart of the continent of Europe.
John Keir, Ross Learmont Ltd.
24 September 2014
Copyright ©, 2014, John Keir