The launch of the new alliances will lead to challenges and even fiercer competition between European ports. Container Shipping & Trade speaks to key port operators about the new set-up
The new mega alliances have launched and their reshuffled services have already had a considerable impact on European ports.
Among the ports feeling the greatest impact is Rotterdam, according to research by shipment management software solutions provider CargoSmart. The Dutch port has seen its services from the alliances fall by three to 23, but the number of deployed vessels that it will be dealing with has swelled by 30.
Southampton, Antwerp and Hamburg, too, have seen the number of deployed vessels spiral, by 18, 16 and 13 respectively.
In contrast, CargoSmart’s research shows that some ports have seen a fall in the number of deployed vessels that they receive. The services calling at Felixstowe have decreased by three and vessels calling there have plummeted by 21. Bremerhaven has seen its services increase by two, but the number of vessels calling at its facilities plunge by 17.
Average vessel capacity has changed across the 10 ports surveyed by CargoSmart as well, with the one exception of Barcelona, which has seen no change. Some of the greatest changes are at Bremerhaven, which has seen average vessel capacity jump by 1,000 teu, and at Southampton and Le Havre, which have both seen average capacity shoot up by 1,200 teu.
In a webinar on the subject, CargoSmart highlighted some potential challenges. At those ports with more services or vessels, shipment delays may occur due to the increased volumes they are handling. It gave Rotterdam as an example. Here, more vessels will be visiting and the average vessel size will increase by 10 per cent.
CargoSmart has recently launched Route Master, which it describes as the first tool that lets shippers visualise, compare, and respond faster to ocean carriers’ and alliances’ service changes. The company has also launched a new pop-up tool, the Alliance Reshuffle Dashboard, which tracks the shipping alliances’ vessel deployments to their new services. This comes under the Route Master brand.
Hamburg Port Authority chief executive Axel Mattern told Container Shipping & Trade that berth availability and hinterland connections are “key factors” when it comes to dealing with the new alliances and their services. “The challenges with the big ships are on the navigational side. You need to be able to cope with the volumes which are being churned out from all of these big ships. Facilities need to handle all these volumes in a very limited time frame. They are not designed for the storage of containers. They are designed for perfect handling. That is the challenge. You need the capability to enable the volumes to flow.”
But the alliances, too, face challenges when it comes to the ports. “It is a challenge for the alliances, as big as they are. They need to spread their services to a couple of terminals in one port.” He added that one of the bigger questions was how the alliances get their cargo to the hinterland.
This is something on which the Port of Hamburg has focused. Mr Mattern said: “We are more focused on the rail side. We are convinced that the success of the port is entirely down to hinterland activity. No other factor is involved any more.”
The Hamburg Port Authority boosted its container intermodal terminal from seven tracks to nine in the second half of last year and can now handle one million teu by train, rather than the 700,000 teu volume it carried previously.
Mr Mattern explained that IT and intelligent systems are pivotal when it comes to handling the larger ships operated by the new alliances. The port has introduced an appointment system for trucks in order to avoid a build-up of traffic in port. Four parking areas have been opened by the port around the motorways leading to Hamburg. These are connected electronically to the container terminals so that the truck driver can see when the vehicle needs to be at port to receive or deliver the container.
Hamburg’s hinterland improvements are paying off. Hinterland traffic has “steadily” increased by 2-2.4 per cent a year over the last few years, according to Mr Mattern. Last year the port carried 2.5 million teu by rail. “These volumes are the most important index for us,” he said. “We have a huge volume of feeder containers. They are good business because they are counted twice, but they are not money spinners for the port. A container that goes to the hinterland is a more attractive proposition.”
Hamburg port has had long-running problems with its river navigation. It needs to dredge the River Elbe by one further metre to boost the movement of ultra large container vessels through the port. It has made progress with this, as the Federal Administrative Court of Germany has decided the dredging is possible, subject to the Hamburg Port Authority and the Federal Government providing the answers to three specific questions.
Mr Mattern said that this information should be ready by the end of the year. The matter will then go to European law, to decide whether the dredging can go ahead. It is expected to be approved, with dredging starting in April 2018. This will allow more ships to enter and exit port at the same time.
Nonetheless, Mr Mattern believes that when it comes to serving the alliances, hinterland connections are more important. He said: “The draught is a technical challenge but it is not impossible. It is workable. Alliances are calling, so it cannot be that bad.”
“There is fierce competition between the bigger ports – fiercer than ever before. There is more pressure for further expansion projects, and there is pressure on ports to finish projects quickly and on time.” Luc Arnouts, Port of Antwerp
Elsewhere, the Port of Antwerp is gearing up to welcome Maersk Line’s Madrid Maersk in June. Since the alliance reshuffle it has gained capacity in the Far East–Europe carrier networks, and the number of alliance vessels it will serve has jumped by 16. Antwerp Port Authority chief commercial officer Luc Arnouts told Container Shipping & Trade: “We are very happy with the new set-up. We have a good breadth of services with all three alliances calling at our port.”
A very important development when it came to the port’s readiness for the new alliances was the relocation of the Mediterranean Shipping Co (MSC) terminal from the right bank of the river Scheldt in Antwerp to the left side, at the end of last year. Mr Arnouts explained why this was significant. “On the right bank the terminal was behind the locks. This location makes the technical manoeuvring of a bigger ship a more risky operation. The lock is 68m wide, and a ship of 60m wide passing through has little room for manoeuvre if it is to carry out this operation in a safe way.” There are no such difficulties with the new terminal as the lock is tidal, allowing “preparation for the new alliances and bigger ships.”
Another benefit of Antwerp when it comes to the new alliances is that each alliance will operate from its own terminal. “This is an immediate advantage when it comes to combination, consolidation and transshipment, and enables more efficiency,” Mr Arnouts noted.
The river on which Antwerp’s terminals are located is a crucial factor when it comes to serving the mega alliances. “We pushed for the deepening of the river in 2010, and that was just in time.” It enabled the port to jump from handling vessels of 14,000 teu to vessels of 18,000 teu capacity, providing a draught of 16m. “We had to do this. Otherwise Antwerp would cease to play a major role,” Mr Arnouts said.
The river continues to play a central role in Antwerp’s big ship strategy. “A lot of work has been done on collaboration between different partners in the nautical chain to use the river to maximum capacity. We want to avoid situations where ships have to stop in their tracks on the river because an ultra large container ship is arriving. I feel we are now getting more capacity out of the river than we would have done in the past.”
Studies carried out by Antwerp Port Authority show that there is still more capacity available on the river. “We did these studies so that shipping lines know that we can handle their business today and grow with them in the future.”
The reshuffling of the carrier networks and alliances has led to more competition between ports. “There is fierce competition between the bigger ports – fiercer than ever before. There is more pressure for further expansion projects, and there is pressure on ports to finish projects quickly and on time,” explained Mr Arnouts.
The capture of 2M services via MSC’s new terminal means that the port is expecting higher than average growth rates. It is cautiously expecting volumes to rise by 2.5-3.5 per cent this year.
“Despite the uncertainty caused by the bigger alliances, we are excited that Antwerp is part of this and in the top league,” Mr Arnouts summed up.
Meanwhile, DP World, which operates a clutch of container terminals in Europe including Le Havre, London Gateway, Rotterdam World Gateway and Antwerp Gateway, is focusing on building strong relationships with its customers when it comes to facing challenges and taking advantage of new opportunities.
A DP World spokesperson told Container Shipping & Trade: “We have invested in relevant capacity and continue to operate in a manner that ensures that we remain the port operator of choice for our customers. We have been quite successful and feel honoured that most of the alliances have re-confirmed their trust in us to handle their vessels.”
He continued: “While a major re-alignment of corporation agreements does provide challenges, by working closely with our customers and understanding the challenges they face, we have been able to overcome these issues and deliver a smooth transition for them.”
Axel Mattern, Port of Hamburg: snapshot CV
Axel Mattern has worked within various shipping companies and shipbrokers in Germany and the USA as well as in port operations. He is well versed in the industry and in the organisation of hinterland transport. From 2001 to 2009 Mr Mattern worked as head of sales and marketing at terminal operator Wallmann & Co. He joined Port of Hamburg Marketing in 2009 as director of market development. In 2011 he was appointed as an executive board member.
Luc Arnouts, Antwerp Port Authority: snapshot CV
Luc Arnouts obtained a master in law at the University of Antwerp and a master in general management at the University of Ghent. He has been active in the port and logistics sector ever since. He started his career and gained operational experience in stevedoring, warehousing and ocean freight forwarding at the logistics company Group Katoennatie from 1986 until 1992. In 1992, he moved to SGS-Group Belgium as general manager of SGS-Van Bree. Aviapartner became his new employer in 2000, where he held the position of VP cargo handling Europe. In 2007, he took up a new challenge as chief commercial officer at the Antwerp Port Authority.