RLL Container Report - 26 November 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 26 November 2014
Poles apart.
On the 3rd of December, a major new north-south rail link will be inaugurated when the presidents of Kazakhstan, Turkmenistan and Iran open a new railway that will form a vital trade link from Europe down to the Persian Gulf. The railway stretches 900 km and will cut the distance between Russia and Central Asia to the Persian Gulf ports by 600 km. This new line to the Gulf comes at a time when seaborne container traffic within the Middle East and the Indian Sub-continent grew by 16.4% to 559,000 teu. Not to be outdone in this building fervour, Kazakhstan’s neighbour, Uzbekistan is to invest USD 1.9 Billion in a new 129-km rail line to link up the eastern provinces of the country, Andijan, Namangan and Ferghana, which are surrounded on three sides by their neighbours, Kirgizstan and Tajikistan.
At the same time as extending the rail connection south, Kazakh Railway (KTZh) is to invest Tenge 110 Billion (Euro 455 million) in establishing a series of transport-logistic centres to serve the growing trade with its eastern neighbour, China. This is in addition to the Tenge 37 Billion being ploughed into a “dry port” at the rail station in Khorgos, which acts as the main transit point between the Central Asian Republic and China. Khorgos will also host a planned Special Economic Zone. On the other side of the border, Chinese Railways are continuing to expand their high-speed rail network into the western province of Xingjiang. On the 16th of November, commercial services began on the first section of the high-speed line linking the regional capital, Urumqi with the provincial city of Hami. Over the next five years, Chinese engineers will extend the 1214 km rail line to the city of Golmud in the neighbouring province of Qinghai. As a result of all this activity, container transit times on both the north-south and east-west trade routes will be significantly improved.
In October, container handlings at Chinese ports rose by 9 percent to register a total of 17.4 million teu, of which 16.5 million were handled by the sea ports and 1.7 million by inland ports. The port of Shanghai alone handled 3.02 million teu, which represent a rise of 7.5% on last year’s total and a slight increase on the figure for the month of September. The total for the first ten months of the year reached 29.5 million teu, which equates to a rise of 5.3% on the same period in 2013. China’s top six container ports reported a 6.1% increase in box traffic to North America as the US economy showed signs of improvement. However, this mini-surge in exports has led to congestion at US West Coast ports, where vessels are sitting at anchor for two to five days waiting for an unloading berth to become available. To add to the ship owners’ woes, it is taking an extra three to five days to discharge the vessels due to a shortage of labour and a lack of space to store laden import containers.
Over in the Russian Far East, there were no concerns about container handling capacity. The recently-formed Garant Intermodal opened a feeder service between the ports of Vostochny and Magadan. Garant Intermodal’s new MES line is operating two vessels, Tanir (built in 1994) and Igor Ilyinsky (built in 1990). In October, the Far Eastern Railways reported a six percent raise in the weight of containerised cargoes to 491,000 tons. As the total number of containers handled in that month grew by only 2 percent to 41,000 teu, it is reasonable to assume that many of the units, which normally return empty via Vladivostok and Vostochny were instead loaded with export cargoes back to S E Asia.
They must be putting something in the tea in Kaliningrad, as undeterred by events elsewhere in Russian Baltic ports, the pene-exclave on the Amber Coast continues to plough its lonely but very successful furrow by increasing box throughput by 6% to return a total of 285,000 teu for the first ten months of the year. It is much the same rosy picture in the neighbouring port of Klaipeda, where box throughput between January and November rose by 10.1% for a total of 371,800 teu.
Further south along the Baltic coast, Polish railways’ freight subsidiary, PKP Cargo is to launch a service linking the main intermodal hub at Poznan with three sea terminals, one at Gdansk and two at Gdynia. In addition to containers, the block trains will be capable of handling semi-trailers operating on the many ro-ro services between Poland and Scandinavia. In order to enhance the country’s ability to process more intermodal traffic, Poland’s state-owned Polish Investments for Development (PID) will assist PCC Intermodal in developing its three terminals at Kutno, Brzeg Dolny and Gliwice. PID is providing Euro 20 million of funding, which will raise capacity at the three rail terminals by 120%.
This increased rail capacity will be welcomed by the three main Polish terminals, all of which report a very strong growth in sea-borne box traffic. Gdańsk led the reporting with 621,066 teu in the first half of 2014 and is just about on target to match last year’s total of one and a half million teu. However, nearby Gdynia posted an even more impressive growth of 22.9% in traffic during the first nine months of the year to record 357,080 teu. This was nearly matched by Szczecin-Świnoujście, which handled 53,536 teu in the period between January and September.
The Poles are lobbying for Gdańsk to be upgraded to the main hub port for the Baltic region. In order to be in a position to claim a spot among the “Range” ports in North Europe, Gdańsk would have to improve the quality of road and rail connections to the hinterland, especially to neighbouring countries in the eastern part of Europe. Gdańsk is studying the success of Gothenburg’s Railport train shuttles and may adopt this as a blueprint for the future. In addition, bureaucracy and “red tape” must be cut out if the Polish port is ever to bridge the gap in quality and service provided by the “grand old lady” by the banks of the River Elbe, who currently dominates the Baltic container trade.
John Keir, Ross Learmont Ltd.
26 November 2014
Copyright ©, 2014, John Keir