RLL Container Report - 12 November 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 12 November 2014
Shipping Line “super-size” their new-buildings.
Shipowners appear to be spending too much time in McDonald’s, as they are all clamouring to “super-size” their new-building programmes. The economic arguments in favour are rather persuasive: in addition to an extra 5,000 teu per sailing, the average unit cost is 26% lower and fuel consumption is over a third less per teu. Orders have been placed at Daewoo Shipbuilding and Marine Engineering for three container vessels each with a capacity of 19,200 teu. Both Lloyds List and Dynamar believe that the USD 155.5 million order has been placed by China’s Minsheng Financial Leasing on behalf of Mediterranean Shipping Company. If correct, this order takes the container industry one step closer to its next major milestone, the 20,000-plus era. United Arab Shipping Company (UASC) has 17 container ships, including six 18,000-teu vessels, on order for delivery between 2014 and 2016. The first of the UASC vessels will be delivered this month. At the same time, UASC’s partners, China Shipping Container Lines have placed a separate order for five 18,000 teu vessels.
Containership owner Seaspan Corp is also mulling over orders for ultra-large boxships in the 18,000 to 20,000 teu range. At present, Seaspan has several 10,000 and 14,000 teu vessels on order and these are scheduled to go on charter to Mitsui OSK, Maersk and Yang Ming between now and 2016. These lines, in common with other major box operators, are “cascading” their container vessels into other routes. The G& Alliance, which consists of APL, Hapag-Lloyd, Hyundai, MOL, NYK and OOCL, is already operating bigger 8,000 teu vessels on its Transatlantic services. Maersk and MSC are expected to follow suit when their 2M Vessel Sharing Agreement comes in to effect in January. Currently, the major box lines are operating vessels with a capacity of 4 to 6,000 teu on the Atlantic route, which serves Le Havre, Rotterdam, Hamburg, Southampton, New York and Norfolk, Virginia. One route that has not been caught up in this “super-size” mania is the Baltic where new-buildings currently on order are in the more modest 1,400 to 2,400 teu range.
While Gothenburg reports a drop in intermodal traffic, the Baltic port of Gdansk has agreed finance arrangements totalling Euro 290 million for a major extension to its container terminal that will see capacity rise to 3 million teu. In addition, a second deep-water berth will be constructed, which will allow vessels of over 18,000 teu to call at the Polish port. Later this month, the German intermodal operator, Kuehne & Nagel has called a Russia Crisis Conference on traffic via the Baltic Sea and overland routes to Russia. The conference will be held at the Kuehne Logistics University in Hamburg and will focus on the drop in freight traffic between Germany and Russia. The delegates may also wish to consider the threat that the terminal developments in Gdansk pose to Hamburg’s traditional role as lead port for the whole of the Baltic Region.
Further south, box traffic in the Mediterranean is also forecast to grow as larger vessels are re-deployed from other services. Currently, some fifteen and a half million teu are transported around the “sea at the centre of the Earth” and this figure is projected to rise to 17 million by 2017. By that time, one of the biggest rail projects in European history will have been completed. On October 31, 2014, Swiss railway engineers laid the last sleeper in the 57-km long Gotthard Base Tunnel. The Gotthard Base Tunnel forms the largest section of the new rail link through the Alps that will provide much faster and more efficient passenger and freight connections between Italy and Northern Europe. Speed trials are already taking place on a special section of the Gotthard Tunnel. When the Gotthard Tunnel is finally completed in December 2016, Swiss Railways plan to operate passenger services at 250 km per hour, while container trains will swish along at 150 km. The Swiss are also working on a shorter tunnel, the 15 km Ceneri Base Tunnel through the Ticino area, which is due to open in 2019 and will shave even more time off the journey time under the Alps.
Further East, Austria and Italy are co-operating on the Brenner Base Tunnel, which is only one kilometre shorter than the Gotthard and which will provide a second high-speed rail link between central Europe and the Mediterranean and Adriatic ports. The new Brenner connection is scheduled to be completed in 2026. A smaller but nevertheless equally important upgrade is being made to the Slovenian railways linking the Adriatic port of Koper with Central and Eastern Europe. When completed the Slovene, Swiss and Austrian upgrades will allow far larger volumes of containerised traffic to operate on the North-South rail routes via the Alps and the Dolomites.
The implications for global container traffic are rather intriguing, as the main Italian container ports at Genoa and La Spezia are less than 900 km from Frankfurt. Munich is under 800 km from Livorno, while Warsaw is about the same distance from Koper in Slovenia. Travelling at speeds of 150 km per hour, container block trains could deliver containerised cargoes overnight to the heart of Europe. Lines could off-load a far higher percentage of their European cargoes at Mediterranean ports, thus saving on the additional expense of sailing all the way around Europe to call at North Continental ports. This may, in the years to come, prove to be a greater threat to the dominant position of the North European ports than the reduction in traffic to Russia brought about by the current sanctions and embargoes.
John Keir, Ross Learmont Ltd.
12 November 2014
Copyright ©, 2014, John Keir