Showing posts from tagged with: Sea Freight

Irish Ferrries Make Radical Changes to their 2018 schedules

The newly released Irish Ferries schedules for 2018 mark a significant shift both in schedules but also in the way in which the Company deploys its ferry fleet.

On its arrival from the builders in July 2018 the 55,000-tonne cruise ferry W.B. Yeats will take up service on the Dublin/Cherbourg route operating a once every other day service in each direction while the Oscar Wilde will also take up a new schedule leaving Rosslare on the alternate days and destined for either Cherbourg or Roscoff.

Irish Ferries have planned a revised schedule from mid-September that will see the W.B. Yeats switching to the Holyhead route replacing the Dublin Swift over the winter months, while the Epsilon will maintain a three times weekly Dublin/ Cherbourg service. The Rosslare/ France service will not run over the winter period, thought the Isle of Inishmore will continue to operate her twice daily service to Pembroke out of the Co. Wexford Port.

In terms of trailer capacity both the Epsilon and the W.B. Yeats have a freight capacity on board in the order of three times of that on the Oscar Wilde.

It is understood that Irish Ferries intend to take up their option at the yard to build a sister ship to the W.B. Yeats. These vessels have been designed to operate out of both Dublin and Rosslare.

Irish Ferries, sister company within the Irish Continental Group, ICG Container and Terminal Division was winner of the 2017 Maritime Services Award, sponsored by the IMDO, at the recent Exporters of Year awards ceremony.

Stena Line do not intend to change their current schedules for 2018 and will retain the revised Rosslare-Fishguard schedule introduced earlier in 2017. No significant schedule changes are anticipated from either Seatruck or P & O Ferries.

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Deep Sea Freight Rates Continue to Ease

The extreme peak in export sea freight rates out of Europe to Asia experienced during the spring has eased back somewhat with Consultants, Drewry showing a rate for 40ft. container from Rotterdam to Shanghai at USD  1290. This is still double the rate of a year ago. The import rate, at USD 1751 has continued to fall and is now 8% more than the rate this time last year. However, actual rates are now likely to increase as traffic volumes heading towards the Christmas peak season. Rates for shipment of 40ft containers out of Rotterdam to New York remain soft, USD 1721 being a 5% drop on the rate a year ago. Import rates from New York remain very low with a figure of USD 527 for a 40ft container, a 15% increase on the rate a year ago.

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Dublin Port Reports Significant Trade Growth in First Half 2017

Speaking at the publication of the first half 2017 traffic throughput at Dublin Port the Port’s CEO Eamonn O’Reilly said; ““The phenomenal growth we have seen in recent years is continuing, with 2017 set to be the third successive record year for Dublin Port. The 2.9% increase in trade in the first half of 2017 brings our growth in just five years to 29%. At this rate, Dublin Port’s volumes would double in just 14 years.

“Work is well underway on Masterplan projects to provide capacity for future growth. These include the Alexandra Basin Redevelopment (ABR) Project and the development of Dublin Inland Port on a 44-hectare site situated 14 km from the Port.

“We are also starting preliminary work on Dublin Port’s second major Masterplan project, the MP2 Project, with a target of applying for planning permission in late 2018. Planning permission and other consents will take about two years, allowing construction to commence as we approach the end of works under the ABR Project. The MP2 Project will provide much needed additional capacity for Ro-Ro freight and container traffic to the UK and, increasingly, to Continental Europe.

“The major development projects in Dublin Port are being guided by Dublin Port’s Masterplan which we are currently reviewing. At this stage, the review is pointing towards a third and final major Masterplan Project (following on from the ABR Project and the MP2 Project) on the Poolbeg Peninsula. This will bring Dublin Port towards its ultimate capacity and able to accommodate projected future growth all the way to 2040.”

Dublin Port company is an active participant in the IEA Multimodal Freight Group.

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Deep Sea Container Shipping Rates Continue to Slip Back

Leading Supply Chain Advisors, Drewry, have reported that overall Container shipping rates have continued to fall back from the heights reached during Spring 2017 though they are still considerably higher than the rates at the same point in 2016. Thus, while in the week to 13th July 2017 overall quay to quay rates for shipping 40ft. Laden containers slipped by 2.1%, they are still up by 13% form the same week last year.

On the export side, out of Europe the annual increase has been much larger, with an average Rotterdam to Shanghai rate now standing at USD 1362, a 119% increase on the rate a year earlier. The Rotterdam to New York rate has, on the other hand dropped by 8% over the year to USD 1717.  The westbound Transatlantic rates are now running at about three times the rate for a container coming eastbound while on Europe/Asian routes the rates are very much closer to being in balance.

In a separate study Drewry reports an unexpected development of services offering sailings direct from Indonesian and other countries deemed to be secondary markets, to Europe. These services replace the feeder vessel and hub services offered in recent years. The direct services make use of smaller vessels that would have been displaced from the main-line services by the arrival of the Ultra large container ships. Use of the direct vessels should facilitate faster and more economical door-to-door freight.

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Port of Cork Developments Power Ahead

Speaking at the IEA Supply Chain Workshop held in Cork on 15th June, Port of Cork Commercial Manager, Captain Michael McCarthy, welcomed the granting of the final planning permissions by An Bord Pleanala that will facilitate the development of the deep-water facility at Ringaskiddy. Following the completion of the development the Port plans to re-locate the container services from the Tivoli location and general cargo from the City Quays area. Container capacity at the port will be doubled and feeder and other lines will be able to operate larger and more economical vessels on their Cork services.

Capt. McCarthy also told the meeting that the Port now has a majority interest in the former IFI location at Marino Point. Current plans will see this location being developed so as to facilitate the berthing and discharging of Bulk vessels. The facility is rail linked and the Port’s plans include the redevelopment of the railhead within the terminal area so that this mode can be effectively used to ship cargo to any Irish location.

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Transport Department Initiates “Land bridge” Study

As part of its Brexit preparations the Department of Transport, Tourism and Sport (DTTAS) has confirmed that it has commissioned the preparation of a study and report on the British Land bridge. The study will seek to determine the likely effects of Brexit on the quick and competitive flows of goods to and from Ireland. It will also seek to give guidance to Department on the steps that it and other Government Agencies should take to minimise the problems identified.

DTTAS plan to have the report completed within six months. The IEA will sit on the Advisory Board for the study and will seek to ensure that the interests of manufacturing exporters are fully represented there.

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Neptune Line, Rosslare Service Opens Up Possibilities for Irish Exporters

Rosslare Europort Manager and IEA Supply Chain Initiative sponsor, Irish Rail, reports the very successful introduction of the weekly Neptune Lines service linking Santander, Le Havre and Southampton. While Neptune Line does operate a number of freight ferry service's the company’s main activity is in Trade Car and Truck distribution with services linking a number of European Ports. Discussions are now underway with a trailer freight operator to establish an export service to Iberian Markets for Irish manufacturers based on this service. Further details of the direct service will be announced shortly.

Irish Rail also advise that the revised scheduling of the Stena Line Southern Irish Sea corridor service linking Rosslare with Fishguard has proven to be successful and have noted an increase of freight traffic volumes through the Co. Wexford Port.

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NCC Publishes Transport Cost Stats for 2017

 

The National Competitiveness Council has published its review of Irish Competitiveness for the year up to February 2017. Within the review is a chapter on Transport costs with figures drawn from a wide range of sources. The highlights include:

  • Brent crude oil rose from USD 27 a barrel to USD 58 in the year to end February, a 70% increase. This is the benchmark standard for all fuel prices.
  • Irish fuel prices at the pump rose by 16.7% in the case of petrol and 18.7% in the case of diesel on the back of the oil price rises. The percentage price changes here are masked by the level of taxation within the pump price.
  • Diesel prices in Ireland at €1,269 per 1000 litres in January 2017 were 9.2% above the euro area average price making Ireland the sixth most expensive country in Europe. Taxation on diesel in Ireland is 58% of price which is close to the average percentage across Europe.
  • Transport prices increased. In the 12 months to Q.4 2016, overall transport service prices were 2% higher. NCC comments that, in the transport sector prices have been relatively stable in recent times though Air transport has been a notable exception with rapid price growth. This moderated in 2016.
  • Administrative Costs and Time to export, 2016. The NCC comments that the ease and cost of customs and administration procedures has a significant impact on trade flows. Compliance costs in Ireland to export a standardised cargo by sea were USD 305 compared with USD 286 in the OECD-19. It takes an average of 24 hours to complete the required procedures in Ireland, slightly longer than the OECD average.
  • Administrative Costs and Time to import, 2016. Irish costs to import a container were USD 253, significantly lower than the OECD average of USD 333, The time taken to complete the necessary procedures is 24 hours in Ireland which is marginally lower than the OECD average but is significantly higher than the comparable time in the UK, US and Canada.

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Service Developments on the Irish Sea Area

 

Stena Line has, following the refit of their vessel Stena Europe that enables the carriage of higher freight vehicles, altered their schedule on the Rosslare/Fishguard route. The new schedule separates their sailing from those operated on the Rosslare/Pembroke route by Irish Ferries, thus giving hauliers a wider choice of sailing times on the Southern corridor route. The most significant likely result of the change will be an increase in volumes coming into Rosslare on the overnight sailing as the 04.00 arrival time facilitates deliveries to major Distribution Centres in the greater Dublin area.

Neptune Lines has opened a weekly service linking Santander with Rosslare with calls en route northbound at Le Havre and Southampton. The main traffic for this service is the import of Trade cars and other vehicles but it is expected that as the route becomes more established hauliers will begin to use it for shipments to Iberia with attendant time and cost savings as against Landbridge routes available up to now.

Seatruck has, following the switch by carmaker Toyota of their supply hub for Ireland from Portbury near Bristol to Zeebrugge, ceased their weekly service from Portbury into Dublin. The contract has now been taken up by K Line subsidiary, KESS, running weekly from Zeebrugge to Dublin. This Line is seeking to develop outbound rolling and other cargo from Dublin to the Flanders Port.

Responding to a question on Natural Gas-Powered vehicles being carried on Ferries at Fleet Transport’s Green Fleet Management with Natural Gas Power Conference, Martin Flach of IVECO said that it was his understanding that LNG powered trucks and buses could only be carried on outside decks. This would put them into a similar category to vehicles carrying hazardous materials. He did not envisage any problem with taking CNG powered vehicles on decks inside the vessel especially those operating in routes with 48 hours or less sailing time.

He confirmed that discussions are ongoing with Eurotunnel to enable Natural Gas-powered vehicles travel through the tunnel.

The IEA has raised the issue with a number of ferry operators with services from Irish Ports and will return to the subject in a future issue. The queries relate to operations on routes throughout Europe.

The Irish Ferries parent, Irish Continental Group has reported steady revenue growth in 2016. Group revenue increasing by 1.5% to € 325.4 million from € 320.6 million. This was despite a fall in ferry revenue by one million euro to € 202.7 million.

CLdN RoRo Agencies, Managing Director, Gary Walker, has advised that the line currently has 24 vessels in operation on its routes out of its Rotterdam and Zeebrugge hubs. From there vessels sail to Iberia, Great Britain, Ireland and Scandinavia. The fleet is built up with Ro-Ro vessels with varying capacities of up to 6,000 lane metres and some Lo-Lo vessels which are used to supplement the core fleet.

There is currently strong growth on the services to and from Dublin with eight to nine weekly round trip sailings, two of these operated with Lo-Lo vessels. In the course of its report on throughput figures for the first quarter of 2017, the Port of Zeebrugge noted that freight volumes out of Zeebrugge to Dublin grew by 4.1% in the period while that to Scandinavia increased by 1.3%. The automotive sector posted a growth of 10.4% in new vehicles handled with a quarterly figure of over700,000 units.

CLdN has an additional six vessels on order with the first of the 8,000 lane metre vessels due to enter service before the end of 2017. As is their normal practice the route allocation of these vessels will be decided on the basis of actual and potential traffic flows on the route network. Work is currently underway to develop enhanced ramp and other facilities at Dublin Port’s Common User terminal. CLdN will also shortly decide whether or not to convert options on another six new-buildings into firm orders.

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The Cost of Shipping Using Sea Freight

                                       

The key elements that moves sea freight costs are the availability of shipping capacity and the cost of fuel.

 

Capacity

On the Irish Sea and near Continent volumes of goods shipped continue to increase strongly.  The IMDO all-island figures for Ro-Ro (Trailer) traffic show a 6% increase over the 2015 figure totalling 1.9 million units. Laden Lo-Lo (Container) traffic increased 4% to 892,000 TEU (twenty foot equivalent units). On the Ireland/UK Ro-Ro services with the exception of Seatruck and to a lesser extent, Stena on its Liverpool service ex Belfast no new freight capacity was added during the year so increasing the space pressure on all services. This situation is likely to remain tight throughout 2017 and until mid-2018 when Irish Ferries will take delivery of a new vessel.

 

For Ro-Ro services direct to the continent no immediate changes are expected on services to French ports, but CLdN continues to add frequencies and increase vessel sizes on their Dublin/ Zeebrugge and Dublin/Rotterdam routes.

On the Lo-Lo services to and from Continental Europe that marketplace is such that lines are able to add or reduce capacity at short notice. They can also switch ports so as to minimise costs.

Services delivering containers and trailers to Benelux Ports are now able to link in with other shipping services covering ports along the Continent’s west coast as well as a widening range of rail services running deep into Europe and beyond.

Throughout the recession, the deep-sea market has been very difficult for all of the lines with massive over-capacity on almost all routes. The main problem has been that the lines have continued to order new larger vessels because they are relatively cheap and can offer considerably lesser costs per unit shipped. The introduction of these Very Large Container Carriers (VLCC) on the Asia/Europe routes has meant that the already large units being used on that traffic are cascaded down to other markets with the owners seeking to fill them. During 2016 South Korean Line, Hanjin collapsed and most lines turned in very poor financial results.

During 2017 the pressure is going to be on to reduce capacity on all routes. This will be achieved by a combination of reduced orders for new tonnage, increased levels of vessel scrapping and the establishment of three new carrier alliances, “2M” consisting of Maersk Line and MSC, “Ocean Alliance” which includes CMA-CGM and Cosco, and “THE Alliance” with Hapag-Lloyd and a number of, mainly, Far East based carriers.  The new Alliances are planned to come into operation on 1st. April 2017 and could lead to a number of changes in service rotations, port calls, feedering etc. exporters should check these out with their Carriers or Forwarder.

These developments do, of course, mean that it is likely that freight rates on these services will increase during 2017.

Fuel Costs

Since early 2016 oil prices have steadily increased and these increases have gone straight through to the price of the Bunker Fuel and to that of Low Sulphur Marine Fuel.

Within the last year, the Bunker Fuel Surcharges (BAF) charged by carriers have increased from relatively low levels to become a significant element in the freight cost. As an example, Irish Sea Carrier, Seatruck’s BAF for the month of February 2017 stands at 14% while Stena Line currently adds almost €20 per standard trailer on its Dublin-Holyhead routes. Where cargo is shipped in trailers shipped aboard vessels transiting the Sulphur Emission Control Area (SECA), which is basically the English Channel and the North Sea, then additional surcharges will be applied.

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