26


Issue 5 2012


South sector suffers in depressed ro-ro market


The Irish Sea ro-ro market experienced mixed fortunes in the first half of this year, according to Frank Nieuwenhuys, freight commercial manager UK and Republic of Ireland for Stena Line. Overall freight volumes were


down 2.2% from January to June versus the same period of 2011, while the single month of June saw a 5.9% decrease from a year earlier. But while the northern corridor


decreased by 1.8% in the first half and the central corridor by 1.5%, the southern corridor shrank by a massive 9.7%. “Although the southern corridor accounts for only 6% of the ro-ro market for the total


island of Ireland, the


slide there is nevertheless a great concern,” Nieuwenhuys says. With around 18% of Irish exports


going to the UK, the double-dip recession in this critical market will affect trade, Nieuwenhuys says. Offsetting this, he believes the strong Pound will benefit Irish exporters. Stena Line’s £200 million


investment on the northern corridor, by way of its new Loch Ryan


Port at Cairnryan, the


VT4 terminal in Belfast and the deployment of two Superfast ships, paid dividends in the form of modest first-half growth. “Our investment might have


been seen as brave by some observers, coming in the heat of a downturn in the market, but it creates interest and opportunities which may not


have existed


previously,” Nieuwenhuys says. “The service upgrade has revolutionised trade links between the key logistics operations around Belfast and Scotland, England and beyond.”


///IRELAND Pallet firm moves into deepsea


Two Superfast ferries ply the Cairnryan-Belfast route where Stena Line has invested £200 million


Stena is trying to build share in a declining ro-ro market with well appointed truckers’ lounges


Belfast’s location reduces costly


additional mileage and saves time, he claims – “the two ingredients that are at the very heart of intelligent logistics planning”. The freight industry has welcomed Stena’s new ships on the Cairnryan-Belfast route owing to their reliability, speed and, for accompanied traffic, the all-round driver experience, he adds.


An unforeseen setback on the


Liverpool-Belfast service was the serious damage the Stena Feronia suffered in March when she was struck by the Union Moon cargo vessel en route to Belfast (the captain of the latter was subsequently jailed for being three times over the alcohol limit). Within hours of the accident, Stena had


agreed a short-term charter for the Clipper Pennant, which entered into service five days later alongside the Stena Mersey. “In the intervening period we


were on a single-ship operation but all the stops were pulled out to manage the diverting traffic. Space was taken up on our Heysham- Belfast and Belfast-Cairnryan services but Holyhead-Dublin provided an alternative option where this


Independent Express Cargo, one of the founding members of The Pallet Network in Ireland, is expanding into deepsea forwarding in order to offer its customers a one- stop-shop for all freight requirements. The Dublin company has set up a deepsea division to strengthen its shipping activities. IEC chairman Owen


Cooke said: “We have always handled some international container business. Now we are seriously going into the deepsea market in a more structured and organised way.” The deepsea division will


focus primarily on imports from China and South East Asia, but will arrange import and export movements from and to anywhere in the world. “The China and South


East Asia market is big and growing,” Cooke points out. “We have wanted to serve that market for some time, but couldn’t find the right partners. Now we have, we feel we can offer our customers a better rate than our


competitors,


as well as maintain our high service levels


by ensuring


documentation, customs clearance and so on are organised before the arrives at its destination.


cargo “The crucial thing is getting


space on vessels, which isn’t always easy, particularly at short notice. We can do this now because our Asia partners have huge buying power with the shipping lines and we can leverage that for our clients’ benefit.” IEC’s deepsea service is


also available to all members of The Pallet Network, so their customers throughout Ireland can benefit from IEC’s international expertise. “Network members can sell our service to their clients - and all of them have clients who move cargo from the Far East to Ireland,” adds Cooke.


Low-sulphur fuel could poison trade suited customers’


schedules,” Nieuwenhuys says. “Having a network to plug into


has huge benefits and we were able to accommodate displaced traffic in a way that ensured it was more or less business as usual for many customers. They were very understanding.”


The Irish Exporters Association has urged Dublin to seek exemption from incoming EU rules that will restrict the sulphur content of marine fuels. Unless the shipping industry is


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given time to adjust, there is a risk of a major increase in freight costs, IEA chief executive John Whelan warns. “For an island nation on the edge of Europe, such a request should receive a sympathetic hearing in Brussels.” Operators in designated SECAs


(SO2 Emission Control Areas) must reduce the sulphur content of their fuel from a current 1% to 0.1% from 1 January, 2015. This will mean fitting vessels with scrubbers, converting existing engines to run on LNG (converting to diesel will still require scrubbers), or acquiring new ships. All these options will require major


investment and shipping lines have pointed out that not all vessels can be equipped with scrubbers, which can cause stability problems or simply won’t fit.


Irish Sea operators are not directly


implicated in the first phase. The EC directive mandates a maximum sulphur content of 0.1% from January 2015 in the North Sea, Baltic and English Channel, but not the Irish Sea, and to 0.5% from January 2020 in all other European waters, including Ireland’s. Irish Ferries has estimated the


increase in fuel costs at 70% when the rules finally comes into force on its routes, putting the overall increase in operating costs at 35-40%. The impact will be “huge”,


confirms Frank Nieuwenhuys, Stena Line’s freight commercial manager UK and Republic of Ireland. “Our view currently is to sail on diesel oil. However, we are evaluating alternatives such as scrubbers, LNG and methanol. “This very severe change will


mean higher costs however it is dealt with since the alternatives will require infrastructure investment,


with increased capitalisation costs to be recovered, as well as the cost of the fuel itself,” Nieuwenhuys says. “A staggered approach will be helpful as practical experience and evaluation of alternatives will have been carried out over several years before the Irish Sea is affected.” The regulations pose questions


for fuel suppliers as well as vessel operators. Analysts say refiners will face significant added costs in refining fuels down to the required sulphur levels and have very little capacity to produce them. Whelan says:


“Our concern is


the knock-on effect on freight rates for exports, which could be as high as 25%. We are not against cutting sulphur emissions, but pushing them down to 0.1% to 0.5% in this tight


time frame is completely


unreasonable at a time when manufactured


goods exporters


are under enormous pressure in Ireland.”


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