Containerships turns on the gas 34 Liquefied Natural Gas (LNG)


will be the fuel of the future on sea and land for shortsea operator, Containerships. The Finnish-owned line has four LNG- powered ships currently under construction and due for delivery in 2016/17 and two LNG-diesel dual fuel road trucks under test in the UK – a forerunner of a much larger fleet that will encompass 20 vehicles next year and eventually make up the entire UK road fleet. New dual fuel trucks are being progressively introduced; some Government funding is available via the DfT. Containerships operates a


regular four sailings a week service, operated by 1,000teu vessels, from Teesport to the Finnish ports of Helsinki and Pori, along with Riga, Klaipeda, St Petersburg and Ust Luga. There is also a similar weekly service from Sheerness. Andrew Frost, managing


director for UK and Ireland says the drive to LNG is all part of a strategy to ‘green’ Containerships’ entire end-to-end supply chain. Eventually, more LNG ships will be added and the plan is to have an entirely LNG-powered fleet, though this will take time as ships can last 30 years and some of the existing ones still have plenty of life leſt in them. In the short term, scrubbers are being fitted to the existing conventionally-powered ships to bring them within the new sulphur emission rules that come into force from the beginning of 2015. This entails taking one ship at a time out of the fleet for conversion, which does mean that Containerships hasn’t been able to enhance its service in the run-up to Christmas. This has tightened supply, but as there is also a downturn in volumes between mainly Continental Europe and Russia due to the political crisis, traffic and capacity are still very


well balanced. “We see LNG dual fuelled trucks as a bridging solution,” Frost continues. “At the moment there’s a dearth of fuelling infrastructure for LNG across Europe which is holding back uptake, but we are convinced that it is the fuel for the future.” The UK has in fact been the biggest adopter of LNG for road transport. Bunkering arrangements for


the new LNG-powered ships have not yet been finalised; with the first vessels not due to go into service until the year aſter next, there is still time to decide. However as all the new vessels are dual fuel they will have the capability to burn both LNG and Fuel/Gas Oil and achieve the new SECA emission standards. Of course, many shippers’


interest in all this talk of new or cleaner fuels is how much it is going to cost in terms of bunker surcharges or increased freight


rates. While shipper groups have complained of a lack of transparency from the lines, unfortunately, there is no clear indication yet what the effect of the new low-sulphur rules will have on the fuel market. Frost explains: “We currently import around 32m tonnes of low sulphur diesel (effectively the same fuel as marine gas oil ) into the EU. We estimate that the extra demand will be about 20m tonnes, which suggests that imports will have to increase by 60%. With


a


shortage of diesel and marine gas oil refining capacity in Europe the normal laws of supply and demand suggest that costs will have to increase substantially for all transport modes, but we don’t know exactly how much, which is why a lot of ship operators have yet to declare the level of increase.” Meanwhile, some of the Baltic


markets have been growing very strongly – double-digit percentages compared with the previous year, Frost adds. Growth in the mature Finland market has been smaller. The country moved from being an exporter of major bulks like timber and paper into high end engineering and manufacturing. Containerships has though


increased its penetration of the timber business by introducing a


new containerised system.


Timber sits on bearers which in turn sit on roller plates that can be quickly slid in or out of the container – the whole operation can be accomplished in about 25 minutes, with minimal handling of the product. Containerships has thus been


able to capture large volumes of the trade from the break-


bulk operators, Frost explains. “Traditionally, the way timber was handled by bulk vessels was for the vessel to sit in port until it was full. But when the recession set in a few years ago, ships were sitting in port for longer and longer which meant that stockholders had to hold ever bigger stocks – which clearly they didn’t want to do during a downturn.” In contrast, the new containerised system means that timber can be ordered on a true just-in-time basis, in as little as ten days from sawmill to shop. The savings in terms of warehousing and storage are considerable, adds Frost. Some timber does still move


in bulk vessels, of course, but containers are increasingly favoured for the high end of the market. Much of this emanates from Russia; the naturally grown, as opposed to ‘farmed’ timber available there is denser and is sought aſter by quality furniture manufacturers. Systems such as this help


cut costs and keep the supply chain efficient at a time when it is under great pressure. With


the UK economy recovering,


the haulage market in particular is coming under a lot of strain, with the already acute shortage of HGV drivers


Issue 8 2014 - Freight Business Journal


///SCANDINAVIA


compounded


by the European Union’s new requirement for them to hold certificates of professional competence, which has prompted many older drivers to retire. Those drivers that are still active are increasingly being poached by firms that haven’t invested in CPC training themselves and who have now found themselves with a seriously depleted workforce. Many shipping lines that


dispensed with their contracted haulage fleets when the recession started to bite in 2008 are now having second thoughts, says Frost. Meanwhile, Containerships is


seeking to boost its driver numbers by training up apprentices, though unfortunately no government funding is available for the haulage sector. “However, we hope that that will change,” Frost concludes. “If shop shelves are suddenly empty, then it becomes a political issue.”


Finnish postmen get out of forwarding


Finnish postal service Itella is pulling out of its Scandinavian air and sea freight forwarding activities in the face of mounting losses. It will in future concentrate on road transport in the region and will also develop its offering in road transport in selected market areas


in Europe, where it


considers it already has a firm foothold and the possibility to increase its market share. As part of a “renewal”


process, Itella plans to give up air and sea freight as well as its service warehouses in Sweden,


Norway and Denmark. Internal logistics in Scandinavia will also be outsourced. Negotiations have started with 300 personnel in Sweden, Norway and Denmark. Itella expanded its freight


and logistics activities in the Nordic Region in 2005 as part of an internationalisation strategy but economic problems and


intense


competition have however, weakened profitability of logistics operations in the region since the financial crisis began. Itella is instead focusing


its operations on Finland, Russia and surrounding areas. Itella has also pulled out


of its involvement with the SkanTrans-PSL network where it has been replaced by


Norwegian a move that forwarder


forwarder, Andersen & Morck (see separate article). In


mirrored


the UK Royal Mail’s ill-fated decision to rebrand itself Consignia, the then Posti also renamed itself Itella. Now, as part of the refocussing strategy,Itella will also revert to its old name.


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