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Issue 6 2013


///NEWS


First customer for London Gateway New boss has big plans for Europa


ships of around 3 , 7 00t eu. Other ports


served in Europe are Rotterdam, Bremerhaven and Las Palmas. In South Africa, they serve Cape Town, Port Elizabeth and Durban. Meanwhile, Port of Tilbury


managing director, Perry Glading, told FBJ in an interview that he was “surprised” at the announcement of SAECS’ move. It appeared, he said, that the new port was pursuing “business not in the size of ship they originally said they would go for” and this reflected increasing competition in the market. “It’s a reflection that the cake we are all eating is not getting any bigger.” London Gateway was built for very large container ships typically operating on the major Far East trades, and the announcement that the first customer will be a niche player operating much smaller ships suggest a change of direction by London Gateway, he


argued. SAECS would account for 7-8%


of Tilbury’s existing container business but, as the port also handles a significant amount of non-box business,


the overall


effect on tonnage would be much less, Glading pointed out. Tilbury meanwhile is pursuing new opportunities in European short-sea markets. Its recently announced partnership with the port of Zeebrugge to explore a possible link could bear fruit by the end of the year, Glading said. Tilbury’s other recent successes include


gaining West African


operator WEC line and the doubling in frequency of existing customer CMA CGM’s round-the- world service. Tilbury is also pushing ahead


with its new logistics park and hopes to be able to announce its first customer fairly soon. Other recent UK container


line switches include Hapag Lloyd’s move from Thamesport


to Southampton and Evergreen’s decision to


switch services


currently calling in Thamesport to Felixstowe, leading some to predict a ‘domino effect’ as lines seek the best possible deal from their port


costs would be much higher, the report argued, because they could not immediately achieve the economies of scale that Felixstowe’s could. The consultants calculated


service providers.


The move by SAECS - in which Maersk is a dominant player - to London Gateway could be interpreted as a move by the Danish operator to play off DP World against Felixstowe, where the majority of its UK services are currently based. Felixstowe’s owners, Hutchison


Whampoa, meanwhile, has hit back with a report commissioned from MDS Transmodal that purported to show that, considering both inland and maritime costs, the Suffolk port has an overall cost advantage of £26 per container. Felixstowe’s rail services also offered economies of scale compared with the competition, it added. London Gateway’s per-box rail


that inland transport costs from Felixstowe per one-way container were £312 - cheaper than London Gateway’s £321 and Southampton’s £322. To this could be added another another £17 of on-water diversion costs to London Gateway from the key Benelux shipping lanes — an extra 76 miles, said MDS. The report also questioned


London Gateway’s claim that it could cater better for the London market because London could be effectively served by Midlands distribution centres, even though they were up to 125 miles north of the capital. Only 4.6% of Felixstowe’s current


container traffic is


headed for the Greater London area, it claimed.


SAECS to merge with Medshuttle


The switch of UK port call will not in itself have any immediate impact on the SAECS service pattern. Mal Hurdidge, UK and Ireland cluster manager at SAECES member, Safmarine, said his line “is not aware of any plans to increase vessel size on the SAECS service as vessel size is determined by, amongst others, current draſt restrictions in the South African ports. We are also not aware of any planned changes to the network through the addition of new ports of call.” But London Gateway would


provide a modern, open access rail terminal “that we expect will, in time, lead to an upgrade in the quality of rail service compared to that available in Tilbury today. Clearly, it depends on demand to warrant these additional services


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accounts for around two thirds


of the


company’s turnover. One of the UK’s largest privately


owned transport companies, Europa employs 500 people at nine UK branches and also has an office in Hong Kong. Its 2012 turnover was £73m, and it carried about 500,000 consignments. It also offers logistics, air and sea freight services. Europa currently has about 100 trucks working in its colours, either owned or operated by subcontractors. Current Europa owners,


Russell Keep, Andrew Kennedy and Grenville Turner themselves are all long standing employees of Europa who bought the business in a management buyout in 2007. Managing director, Russell Keep is buying a 10% interest and will become group finance director. Kennedy and Turner will stay with the business until the end


of the year, aſter which they will be retained as consultants. Baxter is meanwhile bringing


in a team of former RH people, including Dan Cook, Richard Litchfield, Dion Redpath and Angus Hood, all of whom will join Europa by mid-November. Baxter’s plans for the business


include adding one or two new UK offices, probably to fill gaps in the Leicester and Leeds areas and, for the forwarding business, one or more new offices


in


mainland China. The European groupage


network will also be strengthened, primarily by the addition of new routes to Eastern Europe and to offer customers a single-company solution for all their European transport needs. Some £1.5m of investment


is also going into IT and a new soſtware development team has been recruited to build new finance and transport systems.


Royal Mail sell off ‘in November’


and the cargo volumes may not justify them from day one. However, the existing services from Tilbury will continue so the overall rail product will likely be expanded in fairly short order once London Gateway is fully operational.” But other changes are afoot for SAECS, which is to


merge its operation with the MedShuttle/225 service between January and March. The new joint service will operate with larger vessels and the weekly named day frequency will continue to be maintained by eight vessels. Transit times between North Europe and South Africa will though be largely unchanged.


Algeciras in southern Spain will be added in both directions; otherwise port rotations are the same. The Med Shuttle/225 service


itself, operated by Maersk/ Safmarine between Algeciras and South Africa with MOL and DAL as slot charterers, will end from the fourth quarter of 2013.


The sell-off of the Royal Mail is expected to take place in November aſter the government notified the stock exchange on 12 September that it plans to privatise the business. However, the Communication Workers Union (CWU) said it would ballot its members on strike action against the move. Some 10% of the shares in the privatised business will however go to employees with the rest allocated to the public and institutional investors. The Government pledged


to retain the universal service obligation and six days a week


delivery. The Royal Mail made a profit of


close oin £300 million last year, in part due to the boom in online parcels delivery.


Weekly LCL consolidation service from the UK to the USA.


Contact: LCLOceanExportInquiries@dbschenker.com FBJ September_2013_ 60_270mm.indd 1 www.logistics.dbschenker.co.uk 06/09/2013 09:45:42


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