IBERIA\\\


Issue 7 2013 - FBJ Weak market spells end for freighter service


Brittany Ferries’ move to end the weekend Poole-Santander freighter service operated by the Cotentin is an indication of the current weakness in the market – not only to Spain itself but to France, says Jon Clarke. The cross-Channel operator’s freight director – who was


due to leave the company at the end of September having completed his four-year contract – says that it was less the performance of the Spanish market per se but the soſtness in the French market which made infill services during the week to Cherbourg unviable.


Carving out a niche in a tough market


It is possible to make a living on freight to Iberia, but it’s important to offer a quality service and to consider offering something a little different from the norm, says Formula Goss International. FGI runs regular groupage services from the UK to Barcelona, Madrid and Malaga. Departures are generally on Tuesdays, Wednesdays and Fridays and trailers can, for example, serve both Madrid and Malaga – but dedicated vehicles will run when demand warrants it. “It’s a very flexible system,” explains FGI co- director Ian Logan. Depot to depot transit time is


two days and deliveries to the rest of the country are generally next-day. Services mostly operate via the Channel Tunnel, mainly because of the flexibility it offers over the less frequent ferry services from southern England to Spain, and are double-manned.


Barcelona consists mainly of


what could be termed ‘normal’ groupage traffic, says Logan, whereas Madrid groupage is supplemented by South American origin or destined airfreight via Madrid airport. Airfreight rates from Madrid can be more attractive from there than in the UK and many of the South American carriers only serve Madrid in Europe. There is also some postal traffic heading to and from South America. Malaga, with its 1 million-strong


British expat community also has a lot of online shopping traffic – ordered from British retailers and delivered to FGI’s depot. Spain is still a tough market,


says Logan and it has been hard to make headway in the face of the oſten dire economic news. Rates are constantly under attack, he adds. FGI has countered this by finding niche markets and offering


a higher standard of service. In Portugal, FGI works with local


agent Luso Cargo and operates around 5-6 trailers a week in each direction to Lisbon and Oporto, depots which also serve the rest of the country. Again traffic can be split between depots or with services to Spain or France. Oſten, there is also traffic from France to Portugal and rates are oſten better than from the UK – to the extent that some truckers prefer to run empty from the UK to France and pick up better-paying loads there, says Logan. Again, there is flexibility in FGI’s


network helped by the fact that Lusa and FGI have the same agent in Spain – Seitrans. There is some internet


business to Portugal, but it tends to be palletloads of goods ordered by bricks-and-mortar retailers catering to the British community rather than goods


ordered directly online. Out


of Portugal, there are plenty of tiles, textiles, shoes, carpets and sheets of cork. The market though is very


tough and FGI had to carry out a cull of some of its poorer-paying traffic some time ago, with the result that it is carrying less traffic now but making more money. “Competition is fierce, especially for UK exports,” Logan says. FGI also offers a service to


the Iberian offshore islands, including


Madeira and the


Azores – its agent runs a container service from Portugal. “It’s not a huge traffic from the UK, but again it’s a niche market for us,” Logan explains. There is a similar container


consolidation service available from Madrid to the Canary islands, probably the quickest way of getting groupage from the UK to the islands, Logan believes.


Taking the train from Spain


Now isn’t the best of times in Iberia but that hasn’t deterred managing director


of FFG International,


Graham Martin from exploring new opportunities. The Oldham- based operator has just launched a new intermodal service from eastern Spain (near Valencia) via Antwerp and Zeebrugge into Purfleet, Killingholm, Teesport and Rosyth using rail from Taragona to Antwerp, a short road shunt to Zeebrugge and by the various ferry services from there to the UK. The service is available northbound only. While not the first rail-based


service from Spain to the UK, it is more dependable than existing options and, moreover, one which offers a payload of up to 28 tonnes per swapbody, as against the 21t available on the existing Valencia- Dagenham service. The latter service is tied to Ford’s production schedules and may not always be available. Until


now, rail services


between Spain and the UK were considered very much the slow option compared with road, but


the five day transit on FFG’s new offering is only a day slower than road, and offers very competitive rates; moreover, the swapbodies used offer an additional 4 tonnes additional payload compared with road trailers, Martin points out. He adds: “Import road services


from Spain into the UK are very difficult at the moment, mainly because traffic to Spain is very poor, so there isn’t the equipment available to reload back to the UK.” FFG can also offer sea-


based options from Leixoes to Tilbury and Thamesport on the MacAndrews service and from Valencia to Felixstowe on MSC and Zim. UK exports to Iberia have dropped in the recession, though, although Portugal has stepped up its exports. Meanwhile, Dutch flower


sales and marketing cooperative FloraHolland has launched a Cool Rail Spain project, a determined effort to get traffic off the roads and onto trains on the long haul from southern Europe. Christo van der Meer, a supply chain consultant for FloraHolland, explains


that the project is running in conjunction with the port of Rotterdam, which sees itself developing into a global flower hub with products arriving by sea, land and waterway from all over the world. Cool Rail Spain looked at a


number of options, including the existing Lorry Rail trailer and flatcar service that operates from Irun on the Spanish-French border to Luxembourg. It was cost effective and transit time was competitive, compared with a single-manned truck on the road, but the project leaders were put off by the relatively long road journeys that would have been involved at each end of the route. It therefore joined forces with


other importers and applied for funding from the Dutch Ministry of Infrastructure to create a new Valencia-Rotterdam train service operating at least five days a week during the peak winter demand season and capable of moving 3,900 containers a year in 30-container trains. “We expect by the end of


the year to have a clear idea of how we will get there,” Meer explained, “and also how we will solve problems such as the different track gauge between Spain and France. We also have a list of rail service providers, and we’re looking for companies with cargo. We hope the trains will be running by the end of next year.”


“We were just not getting


the utilisation of the vessel, so regrettably we are withdrawing the ship,” he told FBJ. She will probably be chartered out. Britanny still offers freight capacity


on its remaining multi-purpose vessels from Portsmouth, Poole and


33


Plymouth to Santander and Bilbao and its French services,all of which are orientate towards the south-west of the country also cater for Spanish- bound or origin traffic. However, a number of factors have conspired to make this year a uniquely tough one for the Spanish freight market.


The long haul to recovery


Palletways’ decision to introduce additional line haul services from its Spanish and Portuguese operations to other points in Europe this November is testament to the belief that the long-awaited Iberian economic recovery is at last underway. “We are planning to increase our daily hauls from Spain and Portugal to France, Germany, UK


and Benelux,” confirms


Palletways Europe managing director, Rachael Alpha. “It will further improve transit times to and from this area and it’s an investment we wouldn’t be making if we didn’t believe that the market was recovering.” Palletways Europe was set up in 2006 to develop pan-European collection and distribution services. It started by linking existing domestic networks operated by Palletways, such as UK, Italy, Benelux and Iberia and has now expanded into 13 European countries with the complete network being supported by one IT platform. There is no doubt that Spain and


Portugal have had a tough time in the current recession, but there are signs of recovery and much of it is export-led. The international market,


particularly from Spain,


is beginning to show an uptick again. “In a way the recession has actually led to more International opportunities because many Spanish companies who previously did little or no export have found


it necessary to look outside their domestic market in order to survive,” says Rachael Alpha. Price wars at home have squeezed profit margins significantly in many cases but there is still good business to be had in countries like Germany where the economy remains relatively buoyant. Spanish-produced goods like car and machinery parts and food products are still much in demand in the rest of Europe and networks like Palletways can make the export process pretty painless, she adds. Another factor that has helped


pallet networks prosper in tough times, she believes, is the fact that many suppliers can no longer wait until they have a full or part load to ship as a reduction in orders makes this a longer process. Therefore they often need to ship pallets in smaller consignments of ones or twos which is ideal network volume. At the same time, pallets can be more effective than parcel services for heavier goods, which is one reason Palletways recently expanded its International product range to include a Mini Quarter pallet. At the moment, with the


economy on the floor, the Spaniards themselves


aren’t buying too


much so there isn’t much traffic going back to Spain, but again there are glimmers of hope. There is at least plenty of transport capacity available into Spain – if anything, the tightness is on the outbound leg.


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