ISSUE 1 2010


NEWS


Stena Line is to take over DFDS’s Liverpool (Birkenhead)/Belfast and Heysham/Belfast routes together with four ships, but is closing its route from Fleetwood to Larne in Northern Ireland. At the same time, DFDS is to close its routes between Dublin, Birkenhead and Heysham, which were included as part of its earlier purchase of Norfolkline. Stena said the acquisition,


for about £40 million, would improve its Irish Sea offering and would complement existing services, as well as strengthening Belfast as a transport hub for freight and passengers to and from Northern Ireland. The ships included in the purchase from DFDS are the chartered Lagan Seaways and Mersey Seaways on the Liverpool-Belfast route and the freight carriers Scotia Seaways and Hibernia Seaways. The transaction between Stena


Line and DFDS will be notified to the Irish and UK competition authorities. Stena Line CEO Gunnar Blomdahl said: “We will continue to develop the routes and look at the capacity we will need in the future. During the last 10 years, we have invested


9


Ebb and flow on Irish Sea Tommy Rodgers


approximately €250m in our Irish Sea operations and will continue to invest in the development of our services between Britain and Ireland.” Stena Line also revealed that


it would close its Fleetwood to Larne operations due to continued losses since it acquired the route from P&O in 2004. Irish Sea area director Michael McGrath said: “The route operates with older tonnage which can be problematic but investment in newer tonnage is not an option as the higher capital costs would make our losses even worse. There is no alternative but to close the route at the end of this year.” He added that the decision to close the route was taken some time ago and was not connected with the purchase of the DFDS routes. A spokeswoman for ABP, operators of the port or Fleetwood, said: “Although the announcement from Stena Line regarding the cancellation of its Fleetwood to Larne ferry service is disappointing for ABP, we are still in discussion with Stena and cannot offer any further information at this time. We are confident that the Port of


Fleetwood will continue to offer a viable facility servicing the Irish Sea roll on roll off market.” Stena Line will take over DFDS operations at the port terminals of Belfast, Birkenhead and Heysham and most shore based staff will be transferred to the new company. Stena’s services to Northern Ireland are due for a major revision in about autumn 2011 when its new port at Loch Ryan opens. Construction of the port was reported to be well under way in late 2010. Two new ships are due to take over from the existing two conventional and single high speed HSS ferry currently operating between Belfast and Stranraer. DFDS will also close its routes between Dublin, Birkenhead and Heysham taken over as part of the Norfolkline purchase, due to mounting losses. Options are being examined for the three owned ships on the routes including a sale, charter or alternative deployment on DFDS’ route network. One of the two ro-pax ships currently on the Birkenhead route will probably be transferred to DFDS’ Baltic route network. Port terminal operations and sales agency activities in Dublin


will also be closed. DFDS said that the routes have


made substantial losses due to overcapacity on the Irish Sea. DFDS CEO Niels Smedegaard,


also cited losses as the reason for its moves to dispose of the routes to Stena. “The Irish routes we took over in conjunction with the purchase of Norfolkline have, in spite of the recent impressive efforts by everyone employed on the routes, in the last two years lost more than €30m. Given the depressed economies a turnaround of the activities, without structural solutions, is not realistic. We have decided to scale back our activities and sell the two routes to and from Belfast.” In a statement, DFDS added:


“In recent years the routes have made substantial losses due to considerable overcapacity on the market. This is a result of a sharp decline in demand since 2008 and a lack of adjustment of capacity in the market. Against this background it has not been possible to develop a business plan that would lead to a significant result improvement within a reasonable period of time. Likewise, it has not been possible to achieve a sale of the activities.”


Are boxes a grey area?


Members of the European Shippers’ Council are to form a working group to reconsider the ‘grey box’ concept as a means of reducing container equipment shortages, improving container fleet productivity and cutting carbon emissions. ESC says the concept has been


pushed forward several times in the past but, in spite of the dedication of its proponents, it has never really taken off in practice. It believes that shipping line support has been lukewarm, mainly because, at the time, carriers were not ready to abandon their branded boxes, nor were they willing to contemplate the reorganisation entailed. However, ESC believes the


time is once ripe to re-examine the merits of putting the ‘grey- box’ concept into practice, and challenge the previously held views on the barriers to its adoption. ESC secretary general Nicolette


van der Jagt, said: “Quite a few shippers are interested in taking part, though it would be nice to have some carriers as well.” So far, no carrier had put itself forward. She believes that a pool of grey boxes, while not solving fundamental problems such as trade imbalances, could improve container turnaround times and increase box availability. The grey box fleet would not necessarily have to be owned by the shipping lines, she told FBJ. Groups of shippers, forwarders


or container leasing companies could also operate such fleets, she believed. However, managing a global of co-owned containers could also pose some challenges, she conceded. ESC maritime council chairman


Jean-Louis Cambon added: “The ‘grey box’ concept does raise some big questions largely surrounding ownership/leasing of the equipment, interchange procedures, and the impacts of abandoning corporate or product branding on boxes. This is what the proposed working group should explore as a priority.” During the first half of 2010 especially, container shortages affected trade flows around the world, possibly as a result of slow-steaming, trade imbalances


and a lack of investment in container fleet renewal during 2008-09. While carriers did invest in extra equipment and moved empties to where they were most needed, sometimes on special voyages, these solutions came at a price that was generally passed on to shippers, nor can they necessarily be considered permanent solutions to the problem, argues ESC. As reported in FBJ 3, the UK’s


Freight Transport Association said that there was some evidence that Scottish exporters were suffering from a shortage of containers, caused partly by the lines’ insistence on returning boxes to ports or central depots rather than taking a more holistic approach to the issue.


Train and barge to take the strain


Rail and inland waterways would handle most inland freight moving more than 300 kilometres by 2050 under proposals outlined in a future white paper on the EU’s Common Transport Policy, said transport commissioner Siim Kallas. In a letter to the chairman of the European Parliament’s Committee


on Transport on 10 December, Kallas outlined plans to reduce the transport sector’s CO2 emissions by 50% to 70%. An intermediary


target for 2030 could also be inserted into the document, which is due to be presented by the European Commission within the next few months. The commissioner warned though that many of the changes would


be difficult and take time to implement, although measures such as one stop shops for freight transport within the EU would ease the process.


One of the leading lights of the Belfast freight industry, Tommy Rodgers, died on 31 December. He was 59. Founder of one of Belfast’s leading freight companies TR Shipping in 1980, he played a key role in not only the Northern Ireland but also the wider UK freight industry as national chairman of the British International Freight Association. He was also chairperson of the Northern Ireland Chamber of Commerce and, more recently, worked with Invest NI to promote Northern Ireland exports worldwide. BIFA said: “Tommy was highly influential in the industry and


the energy he put into BIFA over many years will be sadly missed. Tommy never forgot to bring a box of chocolates for the staff and if socialising would never let anyone buy a round.” In 2007 he was awarded an MBE for his work with homelessness


charity the Simon Community in Northern Ireland and chaired its corporate committee for many years. He remained a non executive director at TR Shipping Services until


his death but sold his interest in the company to Mersey Docks plc about eight years ago. However he was already a 50% shareholder in Cargo Forwarding, Cargo Air Freight, Tracco Logistics and Tracco Logistics bv Holland and he then purchased the remaining 50% from the Heyn Group in Belfast. These four companies make up the current TR Logistics Group, which employs 60 people in Northern Ireland and a further 10 in Rotterdam.


ROUND-UP: AIRFREIGHT & EXPRESS


Cargolux is to appeal against a European Commission fine for operating an alleged airfreight cartel that conspired to fix fuel and security cargo surcharges. The Luxembourg freight carrier, along with ten other


airlines, were fined a total of €800 million in November 2010. Cargolux


was ordered to pay €80m. Earlier, four MEPs submitted a question to the European Commission


on 7 December, seeking clarification on the method used to calculate the fines on the airlines. The four - Christine de Veyrac, Philippe Juvin and Dominique Riquet from France, and Luxembourg MEP Georges Bach - asked why European airlines seemed to be more heavily fined than other non-European airlines found guilty of the same practices in their country of origin. They also asked if the Commission would consider carrying out an impact assessment of its penalties policy in terms of their effectiveness and economic and social consequences. Bach said that Cargolux employees could “ultimately end up paying the bill”.


Lufthansa Cargo and Hyderabad (Rajiv Gandhi International) airport operator GMR Group are to develop a south Asian hub for temperature- sensitive pharmaceuticals. The two companies signed a memorandum of understanding in Hyderabad on 3 December. A modern infrastructure will be established at the airport, which opened in 2008, and customs procedures will also be speeded up. Lufthansa Cargo will station a fleet of temperature-controlled containers, including its new Opticooler, launched last August. India is now the world’s largest market for generic pharmaceuticals.


Lufthansa Cargo is offering what it says are the only direct cargo flights between Europe and Manaus in Brazil. Pending regulatory approval, the carrier will operate two MD-11 flights per week, on Mondays and Fridays from Frankfurt to the Amazon Basin city with stopovers in Dakar and Viracopos, São Paulo. The return flights from Manaus on Tuesdays and Saturdays will stop in Quito and Bogotá. Manaus is a free trade zone that has evolved into one of Brazil’s major industrial centres.


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