RLL Container Report - 08 October 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 08 October 2014
A seismic shift in intermodal traffic.
A continuous flow of data points to a significant shift in the centre of intermodal gravity towards Asia. By 2017, Transport Intelligence reckons that the Asia Pacific region will account for 33% of the global contract logistics market. Much of the growth in forwarding and logistics markets will be driven by the USD 14 Billion expansion of the Chinese contract logistics market over the next three years. This will represent more than half of the region’s total growth over the period. While China remains the core driver of growth, low-cost manufacturing is exiting China and is relocating to Vietnam, Cambodia, Laos and to what are termed the ‘frontier markets’ of Myanmar and Bangladesh. This shift in manufacturing has resulted in changes in supply chain requirements. To meet these challenges, major logistics companies are expanding their presence in Asia-Pacific via acquisition or organic growth.
Fesco is also strengthening its position in the Asian market by introducing a second block train service between Vladivostok and Tashkent that joins a sister service, which has been operating since June. The Fesco Tashkent Shuttle originates in S E Asia and then transits via Vladivostok on its way to the new ULS depot in Tashkent. The current block train completes the journey from Vladivostok to Tashkent in twelve days. According to market reports, RZD is thinking of withdrawing from its co-operation with Fesco in Russkaya Troika. Currently, Russkaya Troika is 50% owned by Fesco, while RZD has 25% plus one share. At the same time, TransContainer is evaluating potential purchases among Russian domestic operators. The RZD subsidiary is particularly keen on acquiring a medium-sized operator with a fleet in the range of 2 to 3,000 units. TransContainer may also abandon plans to take a major shareholding in the Slovak operator, ZSSK Cargo Intermodal.
RZD’s concentration on the domestic market may be driven in part by the uninterrupted growth in the Russian intermodal market. Latest monthly figures from Ecodor point to a ten percent rise in box carryings. Throughput in September rose by one tenth to 28,684 teu and much of this growth came from the 47 regular block train services to Vladivostok, Khabarovsk, Novosibirsk and Krasnoyarsk. The agricultural sector may also provide a large slice of the projected increase in box traffic in Asia. Russia and Japan are discussing a joint project to develop the cultivation of wheat and soya in the arable lands of Siberia and the Russian Far East. Currently, the area of land under soya cultivation is growing at a rate of 10 to 15% per annum. At the same time, Japan and other S E Asian countries witnessed a 40% increase in soya consumption.
However, we should not rush to discount the Old World just yet: the DCT terminal in Gdansk starts work on the USD 240 million new box facility in the Baltic port. When completed in 2016, DCT’s capacity will expand to 4 million teu. In addition to a draught of 16.5 metres and a 600-metre long quay, the terminal will boast no less than seven gantry cranes each capable of handling vessels of up to 25 boxes wide. This will not only put the local competition in the shade but also a large part of the surrounding city. The Gdansk port will act as one of the hub ports for the new 2M alliance between Maersk and MSC. Assuming it is given the go-ahead, the 2M alliance will command 29% of the market slot capacity and will also dominate the Ultimate Container Ship category. The Dano-Swiss grouping will employ 32 vessels with a combined capacity of 585,000 teu.
Round the Baltic coast in Klaipeda, the local port, which had averaged 36,350 teu per month from January to August, returned a very healthy total of 38,700 teu for the month of September. Further north in Sweden, ACL has chosen Södertälje as its dry import hub for the Stockholm area. ACL, which is part of the Grimaldi Group, moves four out of five of its containers from the Port of Gothenburg by rail, including its regular shuttle to Södertälje, which is situated only 30 km from the centre of the Swedish capital. Meanwhile, Sweden’s neighbour, Finland gave the European shipping community an insight into the future of short-sea transport. Helsinki-based Containerships is adding two, dual-fuel vessels, each with a capacity of 1,400 teu. These will be the first short-sea vessels to run on liquefied natural gas. The vessels will be delivered from Chinese yards in 2017 and can run on both LNG and standard bunker. Typical for vessels operating in the Baltic region, the ships tend to carry more specialised units, including up to 639 x 45’ HC palletwides and 300 refrigerated containers.
Underlining the tendency towards block trains serving greater distances, P&O Ferrymasters and their partners in the Transmec Group are to launch an intermodal service between Belgium and Romania. Operating with three departures per week, P&OFT are offering a transit time of four days between the North Sea port of Zeebrugge and Curtici in Romania. As with most of these block trains on intra-European routes, cargo includes not merely dry goods but also temperature-controlled goods and a range of ADR/RID hazardous categories. In the meantime, the Romanian government is discussing with the European Commission ambitious plans to construct a high-speed line from Bucharest to Iasi and from there on to the Moldovan capital in Chisinau. The construction costs on a route of just over 550 km are estimated at USD 20 million per kilometre.
In the meantime, the European Investment Bank confirmed that it will provide a more modest sum of Euro 55 million to the Ukrainian government for the construction of the Beskydy railway tunnel. This relatively small investment will upgrade the line to dual track and will speed up container flows on this important link between the broad and the European Union’s standard gauge networks.
John Keir, Ross Learmont Ltd.
08 October 2014
Copyright ©, 2014, John Keir