Spectre of European Container Port Congestion: Analysis

By George Backwell
Tuesday, July 01, 2014
Schedule Reliability, Asia-Europe Services, Q1 2014 (% of calls on time): Image DMR

The North European ports of Rotterdam and Hamburg are experiencing significant congestion, an echo of the issues last seen around the world during the boom of the early/mid 2000s – before the global financial crash took over. The causes of the current congestion are numerous, but poor carrier schedule reliability is high on the list. Are these port congestion problems just temporary, or indicative of a new paradigm for the industry? Drewry Maritime Research considers possibilities in their latest 'Container Insight Weekly'.

The current congestion difficulties  of Rotterdam and Hamburg are partly because terminal capacity is being affected by work to upgrade existing facilities (such as installing new cranes at the ECT Delta terminal) and also because, in general, terminal capacity continues to be  strained by much greater peaks in volumes created by larger container ships.

However, another big factor causing problems for terminal operators is deteriorating carrier schedule reliability. If ships arrive ‘out of window’, then terminal operators may not have a berth available or the necessary number of cranes to handle their cargo efficiently.

Average reliability across all carriers in the Asia-Europe trade lane has declined from a high of 83% on time port calls in mid-2012 to just 51% in the first quarter of 2014, with on-time  arrival being defined as within 24h of the advertised date published before loading.

In Hamburg, the increased volume peaks caused by larger vessels, coupled with schedule reliability issues, have reportedly caused a doubling of average dwell times for export containers. There have also been delays in truck and rail handling. Truckin g companies have imposed a Traffic Congestion Surcharge, set at 40 Euro per transport within Hamburg city limits and 80 Euro per transport outside of Hamburg city limits. There is an intention to implement a truck booking appointment system in order to control and smooth out demand – not for the first time.

Carriers are also reacting. The G6 Alliance recently announced its intention to shift the German call of its Transatlantic‐Transpacific Pacific Atlantic 1 (PA1) pendulum from Hamburg to Bremerhaven due to congestion in Hamburg. Meanwhile, in Rotterdam, feeder operator Team Lines has announced that with delays of up to 48 hours being experienced at the ECT Delta terminal, and the possibility that this problem may last for several months, it may have to introduce a congestion surcharge or omit some calls. This follows earlier notifications relating to Hamburg. Unifeeder has also alluded to similar issues.

There are a number of reasons for the carriers’ recent schedule reliability issues, including bad weather. However, dysfunctional networks due to the implementation of new or extended alliance arrangements are also a key factor. The process of altering services, ships and partners appears to have had a significant adverse effect as carriers shuffle vessels in anticipation of new alliance and service structures. The geographical expansion of the G6 Alliance into the Transatlantic, and the addition of Evergreen to the CKYH Alliance between Asia and Europe are two cases in point.

In this respect, the huge variation in the reliability performance of individual carriers is highly significant. Figure 2 [displayed here] shows the wide range for Q1 2014 around a (low) average reliability across all carriers of just 50%.

For ports and terminals, the implication of widely differing carrier performance is highly significant. In Rotterdam for example, it is Hutchison’s multi-user ECT facilities which have the congestion issues, whereas the APM Terminals facility in the same port is not congested. At least in part, this must be a reflection of the fact that the majority of the traffic for APM Terminals is still from Maersk Line, the highest performer in terms of reliability. By contrast, ECT handles a much wider range of services for numerous carriers and alliances, and poor timekeeping by one carrier or alliance has a knock on effect for others in terms of terminal operations.

What is the outlook for congestion in the key Northern European ports? There is some good news. Rotterdam for example has two new deep sea terminals opening later this year, whilst in Germany, Wilhelmshaven remains an under-utilised asset.  The implementation of the now abandoned P3 Alliance would most likely have impacted the schedule reliability of its three members, but this is no longer an issue. However, the volume peaks caused by larger vessels are not going to go away, and further alliance developments seem likely, even if the P3 is not happening.

Many issues relating to long import dwell times also still have to be resolved. They may no longer have been important during the economic depression, but cargo growth is back, so they are on the front burner again.

Drewry’s View
Further congestion problems are likely to be seen in North European ports in the coming months as alliance developments affect schedule reliability. Longer term, much depends on what the steady-state reliability performance of the alliances ends up being.

Source: Drewry Maritime Research
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Swiber Applies for Judicial Management Instead of Liquidation

Singapore oilfield services company Swiber Holdings Ltd said on Friday it has applied to place itself under judicial management instead of liquidation.   Swiber

Cenac Marine to Christen New Vessel, Donate Barge

A ceremony will be held July 29 at Cenac Marine Services headquarters in, Houma, La. To commemorate the christening of its newest vessel, M/V Quincey Cenac, as

Concordia Maritime Posts Q2 Profit

Facing a “gradually deteriorating market,” Sweden based tanker shipping company Concordia Maritime said it was able to post a profit in Q2 2016 based on high vessel

Ports

U.S. Awards $61.8 Mln for Port Projects

U.S. Transportation Secretary Anthony Fox today announced 40 awards totaling nearly $500 million in funding for the  FY 2016 Transportation Investment Generating Economic Recovery (TIGER) grants.

DP World takes over Rodney Container Terminal, Canada

DP World has signed a long-term lease agreement for the expansion and operation of the multi-purpose Rodney Container Terminal at Saint John, New Brunswick, Canada.

Moody's: Challenges Ahead for Asian Port Operators

Moody's Investors Service says lackluster global growth, weak commodity prices, high capital expenditure commitments and a liner industry struggling with overcapacity

Container Ships

DP World takes over Rodney Container Terminal, Canada

DP World has signed a long-term lease agreement for the expansion and operation of the multi-purpose Rodney Container Terminal at Saint John, New Brunswick, Canada.

Boxship Capacity Crosses 20 million TEU Mark

This week, containership fleet capacity has passed the 20 million TEU mark, another milestone in the rapid rise to prominence of the sector, according to Clarksons Research.

Asia-N.Europe Box Rates Jump 58 pct

Freight rates for shipping containers from ports in Asia to Northern Europe jumped 58 percent to $1,125 per 20-foot container (TEU) in the week ending Friday, a

Logistics

Boxship Capacity Crosses 20 million TEU Mark

This week, containership fleet capacity has passed the 20 million TEU mark, another milestone in the rapid rise to prominence of the sector, according to Clarksons Research.

MED AMERICAS will Replace MGE Service

CMA CGM is revamping it MGE service becoming the MED AMERICAS, stand-alone CMA CGM service with dedicated fleet of 11 vessels of 2,500 TEU, in a continuous effort to improve service coverage,

China Refineries Enters Global Oil Trade

During the last year, China’s “teapot” refiners are helping to boost China’s crude import demand and their influence is expanding, says Clarkson Research Services.

Consulting

Crew Kidnapping Rising in Gulf of Guinea - Dryad

In contrast to the substantial numbers of reported incidents across Southeast Asia and the Indian Ocean in recent years, maritime crime now appears to have stabilised

Friend of the Sea Turns to BMT for Reefer Vessels Certification

BMT Surveys (BMT), a subsidiary of BMT Group, the international maritime design, engineering and risk management consultancy, has been engaged by Friend of the

BMT to Lead Repower for Historic USCG Eagle

BMT Designers & Planners, a subsidiary of BMT Group, an international maritime design, engineering and risk management consultancy, is leading the effort to repower the historic U.

 
 
Maritime Careers / Shipboard Positions Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1051 sec (10 req/sec)