Structural Change in Coastal, Inland Shipping
Experts discuss potential solutions at the 9th ShortSea, Feeder and Inland Waterway Shipping Dialogue.
Volatile freight and charter rates, high fuel prices, unemployed vessels and the problems of ship financing are leading to structural change in coastal and inland waterway shipping. Experts are agreed on that. Yet what does this actually mean for the future of the shortsea, feeder and inland waterway ship trades? And how can companies prepare for the transition?
At the invitation of the ShortSea and Inland Waterway Shipping Promotion Center (SPC) and Port of Hamburg Marketing (HHM), these and other questions on short sea and inland waterway shipping topics were discussed at the 9th ShortSea, Feeder and Inland Waterway Shipping Dialogue in the Hamburg Chamber of Commerce on 11 October.
Welcoming the delegates, Dr. Bernd Egert, State Secretary in the Free and Hanseatic City of Hamburg’s Ministry of Economics, Transport and Innovation, informed them about Hamburg’s strong commitment to expanding transport links on the Upper and Lower Elbe. “Sustained strengthening of inland waterway shipping is a priority task for us. The Senate’s goal is to secure reliable conditions for shipping and to boost the inland waterway ship’s share in the modal split in container services from two to at least five percent,” emphasized Dr. Egert.
Feeder and shortsea shipping companies also confront immense challenges on account of the economically difficult operating environment just now: From 2015 stringent ceilings will apply to sulphur emissions in the North Sea and the Baltic, while the first overseas liner services are offering direct calls in the Baltic region, a chronic shortage of empty boxes exists in the hinterland, and imbalances of trade along with a highly volatile feeder market demand flexibility and agility from shipping companies. Jesper Kristensen, CEO of Unifeeder, presented one potential solution at the 9th ShortSea, Feeder and Inland Waterway Shipping Dialogue: “By combining feeder and shortsea services, we can profit from the well-developed network of transport links, securing larger capacities and at the same time achieving cost savings and ecological benefits.”
Formation of alliances could also assist in achieving a sustained recovery in the coastal shipping market, in his speech Joachim van Grieken, Managing Director of European Minibulk eG said that he was convinced of this: “An alliance cannot solve all the problems of coastal shipping, but precisely in times of change it can furnish crucial support, offer expertise and create ideas for a successful future,” stressed Grieken. “It is essential that now especially, shipping companies should actively shape their future, if they do not want themselves to be subject to shaping,” he added.
The benefits of multimodal transport solutions are undisputed, particularly against the background of the aims set by the EU for the reduction of pollutant emissions (Transport White Book), the current shortage of truckers, traffic jams, high fuel costs and the transport industry’s carbon footprint. “In comparison to truck-only transport, with the use of multimodal logistics concepts the CO2 emission between Flumeri (Italy) and Dublin (Ireland) can be reduced by around 1,300 kilograms,” stated Jens Holger Nielsen, CEO of Samskip Multimodal Container Logistics. In order to relieve strain on roads, the environment and transport budgets, the EU Transport White Paper accordingly has the declared aim of transferring around 30 percent of goods transport by road covering over 300 kilometres to other means of transport such as ship or rail by 2030, and more than 50 percent of it by 2050. Michele Nahlop, Seago Line Germany’s Trade & Marketing Manager Germany and Austria, is delighted that numerous companies have already recognized the advantages of seaborne transport on short routes and are making increased use of it. “Feeder transport is the first alternative to the overloaded road network and the restricted capacities of rail transport. Deserving special emphasis are the lower environmental strain compared to other means of transport, as well as a general reduction in the logistics needed,” said Nahlop.
After the lectures, speakers joined in a discussion moderated by Hans-Wilhelm Dünner, publisher of the magazine “Schiffahrt Hafen Bahn und Technik”, on the developments in coastal shipping leading to the structural transformation in the maritime business. Dr. Max Johns, Chief Executive of the German Shipowners’ Association (VDR) explained that for regulatory reasons, the banks had no other choice but to partly withdraw from the volatile shipping sector, and called for the publicly owned KfW (development bank) to embark on ship financing. “Shipowners should adapt themselves to financing newbuildings with a minimum of 20 percent own capital in future. More shipowners should also be active on the bond market,” predicted Dr. Johns. “The German government’s Maritime Coordinator, Parliamentary State Secretary Hans-Joachim Otto, has assented to structural aid for the shipping market. This will enable the German shipping administration to assume leaner form and simplify operation under German flag for shipowners,” he added.
The focus of the afternoon at the event was on inland waterway shipping. Calculations by the Institute for Energy and Environmental Research indicate that a modern inland waterway ship with a capacity of 2,100 tons can replace up to 105 trucks, each with a capacity of 20 tons, producing no more than 33.4 grams of CO2 per ton-kilometre. For comparison: Rail transport produces an average of 48.1 grams of CO2 per ton-kilometre, with trucking the figure reaches 164 grams. From the economics angle, the inland waterway ship is also top class. With an average fuel consumption of 1.3 litres of diesel per 100 ton-kilometres, it is very cost-efficient. Comparable consumption for rail is 1.7 litres and for truck, 4.1 litres.
Hergen Hanke, Managing Director of Börde Container Feeder GmbH and UHH Umschlags- und Handelsgesellschaft Haldensleben mbH, accordingly appealed to shippers to make increased use of the combination of ship plus port. In addition, he called on seaports to provide equality of treatment for inland waterway craft and other carriers. “Terminal operators should also be committing themselves to securing the political and infrastructural operating conditions for a shift of services to inland waterway craft. Among these are not just adequate water depths in the Upper Elbe, but also fair treatment on costs,” said Hanke.
Robert Baack, COO with IMPERIAL Shipping Holding GmbH, is also convinced that the inland waterway ship is an indispensable and very live means of transport: “Inland waterway shipping’s contribution to the transport industry should not be underestimated. The requirements of our customers in German industry confirm for us that a transport world making economic and ecological sense will not function without the inland waterway ship.”
In the interests of integrating inland waterway ships more strongly in multimodal transport chains, however, shippers are also demanding increased reliability of pre-carriage runs to the port. Dependable locks and shiplifts in the canals are indispensable for reliable operations by inland waterway shipping. The Waterways and Shipping Administration of the Federal Government (WSV) maintains the descent structures, modernizing these in line with market requirements. Since 2008 the Scharnebeck Shiplift on the Elbe Lateral Canal, among others, has been fundamentally overhauled. By 2016 the German government will have invested around 47 million euros in new engineering technology, refurbishment of concrete, civil engineering and building technology. Ingelore Hering, President of the WSV Central Area, has presented planning for a new lock in Lüneburg that could be constructed 50 metres away from the shiplift. This new lock would enable modern and larger fleet of ships to use the Elbe Lateral Canal as a transport route. Currently the dimensions of the Scharnebeck Shiplift restrict the length of vessels handled to 100 metres. Ships in the new and also more environmentally friendly fleets transporting larger volumes are mostly 110 or 135 metres in length and can now pass through the Mittellandkanal, but not the Elbe Lateral Canal. Modern coupled ship combinations measure as much as 185 metres’ long and 11.4 metres’ wide. In the new, more spacious lock, these would no longer need to be de-coupled, saving valuable transport time. The findings of a study of commercial viability and feasibility indicate that construction of a lock with a lifting height of 38 metres is technically practical. Financing for this project has not been secured, however.
The concluding platform discussion once again made shippers’ requirements of modern waterborne logistics very clear: reliable transport chains, a functioning infrastructure, equal treatment for inland waterway ships at port terminals, improved utilization of existing capacities and more attractive cost systems. Cooperation will be needed if these are to be fulfilled – If inland waterway shipping companies succeed in pooling container volumes at terminals by the use of larger craft and coupled barge trains, then this reduces operating costs on the terminal side as well as for shipowners. This will also enable shippers to be offered more attractive prices, larger volumes to be transported and ship fleets to be fully utilized, also producing additional arguments for the need for investments in expanding the infrastructure required by inland waterway shipping.
“With this event, we have succeeded with around 160 participants from business, politics, public administration and various associations in embarking on a dialogue on the challenges that shortsea, feeder and inland waterway services need to face up to in the context of worldwide transport chains in seaborne foreign trade,” said a gratified Markus Nölke, CEO of SPC. “The discussions have shown the importance of optimizing multimodal transport chains. The potential solutions developed would relieve strain on roads, the environment and logistics budgets,” added Claudia Roller, CEO of Port of Hamburg Marketing.
