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Container Shipping & Trade

Container Shipping & Trade

Europe shortsea shipping gains momentum

Wed 23 Aug 2017 by Rebecca Moore

Europe shortsea shipping gains momentum
PD Ports expects shortsea shipping vessels to increase in size – one reason that it has installed its fifth ship-to-shore crane

Move over deepsea trades – both small and large ports are eying the shortsea shipping market

Ultra large container ships (ULCSs) and deepsea trades have been hogging the limelight recently when it comes to the European container shipping market, but shortsea shipping has been quietly growing and developing. Indeed, several ports across Europe’s mainland and in the UK, see this trade as a focus.

Indeed, the congestion caused by the ULCS in some of the major ports of Europe has contributed to the growth of shortsea shipping. It was an opportunity spotted by Netherlands-based Zeeland Seaports whose commercial manager Jean Ruinard told Container Shipping & Trade “Shortsea is a growing sector for Zeeland Seaports. With congested ports like Rotterdam and Antwerp, there is space for a container terminal ‘in between’.”

Indeed, the port authority, together with a terminal operator, is investigating building and developing a terminal for shortsea and niche markets. The plan is for the terminal to take up 30-40 ha and have a quay length of 1,030 m.

Zeeland’s current modal split sees shortsea shipping take up 17% of this sector, compared to 51% for inland shipping, 6% rail and 26% road. If the port gets the green light to build the new terminals, then no doubt shortsea shipping’s percentage of the modal split will grow.

Elsewhere, Port of Amsterdam has strong connections in shortsea shipping. The port is situated right in the heart of shortsea routes to Northern-Europe, Great Britain, Baltics and Scandinavia and more than a third of its total transhipment is supplied and disposed of via shortsea to the rest of Europe, including Germany, Poland and Russia.

Port of Amsterdam logistics commercial manager Jan ten Caat told Container Shipping & Trade that shortsea shipping activities take place within all the port’s terminals, with commodities including paper, wood and steel-related products being shipped. The port now aims to boost its shortsea-business even more with the improvements to its facilities.

Mr ten Caat said “The most important one is the building of the biggest new sea lock in the world.” It will be 500 m long, 70 m wide and 18 m deep and when it opens in 2019, the port of Amsterdam will be “ready to welcome more and bigger ships at the same time”, he said. It will offer “more capacity 24 hours a day, is tideless, safe, time-efficient and offers more flexibility.”

The shortsea shipping market is competitive, as not only does Amsterdam compete against other ports but also against trucking. There are direct trucking services between Amsterdam and Scandinavia but trucking is more expensive and the trend towards moving goods in the most sustainable way puts shortsea shipping and inland shipping ahead of trucking, Mr ten Caat said. “Almost 80% of transhipment already takes place through water in Amsterdam. Compared to many other ports, we are much more sustainable,” he said.

Mr ten Caat continued “Throughout Europe all eyes are on sustainability, and many big shippers are more and more interested in finding the greenest way of transport [through shortsea shipping]. We believe that the demand for shortsea shipping will be enormous in the near future, due to this trend. Amsterdam is ready for it.”

UK and Europe mainland: sweet spot

A particular shortsea shipping sweet spot is the container shipping trade between UK and Europe: it a mature but still growing at a steady pace of 3-4% per year.

UK-based PD Ports – which owns and operates Teesport on the UK’s east coast – is certainly capitalising in the growth of container traffic between the UK and Europe.

PD Ports’ business development director Geoff Lippitt highlighted the four main areas of deepsea shipping for the port: transhipment traffic from deepsea vessels, Baltic feeder traffic, feeder services and roro services.

The port has seen its annual container volumes outgrow the market by an average of 12% per annum. Its volumes are around 500,000 TEU a year – a huge jump from the 74,000 TEU that it handled in 2007.

Mr Lippitt said that the Baltic and Northern Europe markets were strong for the port so the UK’s looming departure from the EU is a potential challenge. “One of the industry’s key issues is making sure a new customs regime is robust because all containers will need a form of customs clearance,” he said. Currently, there is no customs clearance regime required and any solution depends on the UK’s customs authority being ready, Mr Lippitt said.

He singled out an important trend – the cascading effect caused by the ultra large vessels will ripple out to the shortsea shipping sector. He estimated that feeder vessels in this sector – currently around 1,000 TEU or under – will grow to about 5-6,000 TEU in five or six years.

“There are a number of ports which couldn’t cope with the larger vessels because of the limited size of their locks. We do not have locks and so have the scalability to move to much larger ships and volumes,” Mr Lippitt said.

This is one reason why the port has been investing heavily in its services and facilities. It has developed 370,000 m2 of warehousing and, since November 2014, has established two rail services connecting direct to its onsite rail terminal. Twice weekly services cover Felixstowe and Scotland. The routes handle between 25,000-35,000 TEU per annum and expanding rail services is part of the port’s strategy to enlarge its hinterland.

The port also recently commissioned its fifth ship-to-shore crane, which went into service in May and will further enhance Teesport’s service performance by reducing the time taken to transfer containers from port to road and rail for UK distribution.

Digitisation drive

It has also implemented the terminal operating system made by the US company Navis. Since 2013, this has integrated all the port’s processes across the container terminal, ferry operations, port operations and its rail terminal into one platform. “It allows us to process boxes very quickly through the port and shippers can use the platform too, giving them visibility of their containers wherever they are,” Mr Lippitt said.

He believes there is more need than ever before for shortsea shipping lines to embrace digitisation. “Large vessels put pressure on feeder resources as there are larger container discharges, in shorter timescales, but shippers on shortsea routes are looking for frequency of short transits,” he said.

Navis has recognised PD Ports’ use of this system and its commitment to excellence and innovation across all terminal operations and awarded the port company the title of ‘Excellence’ at this year’s Navis Inspire Awards ceremony, part of the Navis World Annual conference in San Francisco in March.

Inchcape general manager Dean Davison also highlighted the need for shortsea container liners and ports to embrace digitisation. “Digital platforms optimise efficiency and this part of the market must get involved,” he said. “If a shortsea shipping service were to suddenly run late, it would face a lot of challenges,” But using IT platforms allows visibility across the supply chain and improves punctuality and efficiency, he added.

Mega ports get in on act

It is not just the smaller ports in Europe that see shortsea shipping as crucial to their strategy. Port of Hamburg is known for being a major container shipping hub and services all the main trade lanes. However, Hamburg Port Authority chief executive Axel Mattern told Container Shipping & Trade that the port was a shortsea shipping hub for the Baltic Sea, connecting to 160 destinations in that area.

As if to underline the sector’s importance, the port authority is considering whether to set up a terminal entirely focused on shortsea shipping. “We are discussing [what to do with] an area in the centre of the port and this is one of the options,” said Mr Mattern. “Shortsea shipping is interesting because of the need to get more traffic off the road.”

Currently the shortsea shipping segment is scattered across the port’s different terminals and mixed in with other shipping sectors. Mr Mattern believes that having a dedicated shortsea shipping terminal would be more efficient and lead to even better connections for shipping lines.

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