Sea Archives | Page 55 of 71

RoRo shipping the new sea freight carrier ‘golden goose’

Nov 30, 2022 | Automotive, Sea

Roll-on/roll-off (RoRo) ships are designed to carry wheeled cargo, such as cars, trucks, buses, railroad cars, excavators and industrial vehicles and in this niche sector freight rates are increasing, with some routes fully booked four months out, which means if you have a wheeled cargo to move, you will book today for April 2023 sailings on some lanes!

There are different types of RoRo vessels, including ferries, cruise-ferries, pure car carrier (PCC) and pure car/truck carrier (PCTC) that transport new automobiles, trucks and large industrial vehicles, and it is the latter two that are enjoying unparalleled demand.

Car carrier charter rates have risen to new records, with rates more than doubling, which comes after seven years of weak rates and around 25 vessels scrapped early. RoRo carriers and vessel owners are now enjoying tremendous rates, which are being driven by demand for car exports and investment in construction, mining and agriculture. 

Many of the vessels in this market also carry ‘high and heavy’ cargo and out of gauge commodities needing specialist handling. Putting the sector under further pressure with current demand in a restricted market of supply.

The Ukraine war is pushing countries towards food security, which means there is more investment in agricultural machinery, the global mining equipment market is set to grow 40% by 2030 and now that semi-conductor supply chains are operating again, the supply of finished vehicles for export has boomed. 

Six months ago a flurry of RoRo vessel orders took the car carrier order book to 77 vessels (which equated to about 10% of the global car carrier fleet), but with these vessels due for delivery from 2024 onward, they will do nothing to alleviate the current situation, which is fuelling a fresh round of RoRo construction orders, that are unlikely to fill the vessel shortfall, which could be as much as a 100 by 2024. 

The RoRo market is in crisis. Rates on the spot market are increasing, but they are meaningless, because there is no capacity available with the scheduled carriers, of which there are only five main global carriers.

Demand is high - and increasing - and any available capacity is all taken by a limited number of big customers (FMC, Toyota, Stellantis, VAG etc) with huge volumes and even though supply will increase in two years, it will be outstripped by demand.

The primary issue for the auto industry is they can now make the product but can’t get the vehicles to the point of sale by RoRo and every market is seemingly effected, including the USA, Australia, South Africa and India, with thousands of cars stuck on quay waiting for RoRo availability that will not come, or being held at inland compounds and depots awaiting transfer to the necessary ports to handle these products, it is reported in the industry trade press.

The good news for auto manufacturers is that there is a solution to their shipping headache, which is as competitive or can be even cheaper than RoRo. Shipping finished vehicles in a container.

With consumer demand for general products falling, in the wake of global inflation and rising interest rates, container shipping volumes have slumped, along with rates, creating a massive new opportunity for RoRo shippers of finished vehicles and industrial machines that can be broken down to containerise as at least it can be shipped on a weekly container vessel.

Lack of RoRo capacity, new build vessels entering commission into the sector, and increasing rates means that containerising cars is becoming a very attractive alternative to transport vehicles on long haul lanes effectively and efficiently.

Metro has specialised in the automotive and construction vehicle sectors for over four decades. Working with many of the most respected and established global brands, our specialist teams coordinate the end to end movement of vehicles and machinery around the world, regardless of origin or destination.

Long-standing partnerships and volume agreements with the leading container shipping lines means we can offer the widest choice of services, routes and solutions for finished car and KDV movements.

To learn more, or to discuss our automotive capability, EMAIL Matt Weight now. We have the latest options and alternatives available in a dynamic market, that sometimes goes unnoticed. Matt awaits your call!

The EU’s Emissions Trading System will add another surcharge

Nov 16, 2022 | Environment, Sea

The decarbonisation of global shipping is currently the subject of regulatory intervention: at the international level, with the International Maritime Organisation’s ( IMO’s) 2023 rules, designed to further reduce emissions from vessels; and at the regional level, with the EU’s Emissions Trading System (EU ETS), both of which will potentially add cost to container shipping.

This really is worth a read and ensuring that you are aware of the impact – financially and as an added layer of complexity to moving goods around the world. Since this article was published the introduction of the ETS for the maritime sector has been delayed until 2024 to give industry and the EU time to arrive at a solution.

Sustainability in any element of business has an on-cost, especially for the largest businesses. Protecting the environment doesn’t come free and those costs are typically passed on, from carriers to shippers to consumers. Longer term however it may actually reduce costs whilst having a positive impact on global warming as the technology develops and matures. Metro are huge advocates and always looking on how reductions in greenhouses gasses can be achieved through the supply chain.

But while the cost of compliance for supply chain participants may be noticeable in the short-term, they will become standardised and reduce over time.

More and more shippers want to track and reduce their emissions with service providers and are increasingly adding sustainability to their selection criteria for supply chain partners.

The demand for visibility in carbon emissions has never been higher, which is why we released our MVT ECO module earlier this year, that allows, and ensures that, our customers and shippers can monitor and offset the environmental impact of their global shipping.

The EU ETS sets a “cap” on the number of emissions that various industries may produce and requires companies to obtain allowances that equal their emissions above the cap at the end of the year. The price of such allowances may fluctuate depending on supply and demand factors.

The extension of the existing system to shipping would include all emissions from ships calling at EU ports for voyages within the EU (intra-EU) as well as 50% of the emissions from voyages starting or ending outside of the EU (extra-EU voyages), and all emissions that occur when ships are at berth in EU ports.

Ship operators would purchase and surrender ETS emission allowances, or EU Allowances (EUAs), for each ton of CO2 emissions reported under the scope of the system.

Shipping lines will seek to pass on the cost of compliance, as they have done with other forms of environmental regulatory costs in the past. This will depend on the price of the EUAs and on whether the shipping industry’s involvement is phased-in over several years, or required 100% from day one on the 1st January 2023, as is being discussed by the European Commission and parliament.

Maersk has outlined the costs that would be passed on to its customers and while other lines continue to “closely monitor the progress of the ETS discussions”, MSC has very kindly shared its indicative EU ETS compliance costs (see picture).

From the first quarter of 2023, Maersk would have implemented a standalone surcharge on the Asia-North Europe trade of €255 per reefer, while MSC envisaged a cost of €208 for a reefer.

For more information on the IMO 2023 and EU ETS programmes and to discuss their implications for your supply chain, please contact Andy Smith or Grant Liddell, for a collaborative approach to safeguarding your supply chain…and the environment. It's rather important after all……and we are launching a number of initiatives including electric vehicles, more carbon efficient multimodal platforms and avoidance of traditional fossil fuel driven supply chains.

Metro witness the launch of environmental first – reducing vehicle carbon emissions before they have ever been driven

Nov 2, 2022 | Automotive, Sea, Supply Chain

Operating a fleet of 17 pure car and truck carriers, United European Car Carriers (UECC) is the leading RoRo provider of short sea services for cars and other rolling cargo. Leading customer, Metro, was invited to Zeeburgge, to witness the naming of the world’s 1st hybrid pure car and truck carrier.

UECC, the Norwegian RoRo transporter of rolling cargo held a naming ceremony for its first dual-fuel LNG battery hybrid pure car and truck carrier (PCTC), the vessel Auto Advance, at the Port of Zeebrugge’s, ICO Bastenaken Terminal on the 26th October.

Present at the naming ceremony were Metro directors Tom Fernihough and Matt Weight, who are responsible for key automotive, construction and commercial/industrial vehicle accounts, and consequently big volume users of PCTC RoRo services.

The Auto Advance measures 28 by 169 meters in length (that’s big – think of two football fields), with capacity for 3600 vehicles, over 10 cargo decks and is said to be the world’s first vessel of its type. It will provide significant gains in energy efficiency and emissions reduction as it enters service this year to boost UECC’s efforts to decarbonise its fleet.

It is part of a new build trio of multi-fuel LNG battery hybrid PCTCs that UECC hope will make a real difference for the environment and for their business, as new green regulations are set to shift the RoRo market playing field.

LNG battery hybrid technology, together with an optimised hull design for better fuel efficiency, will enable these new builds to exceed the IMO requirement to cut carbon intensity by 40% from 2008 levels within 2030. Emissions of carbon dioxide will be reduced by around 25%, SOx and particulate matter by 90% and NOx by 85% from the use of LNG, while the new builds will also meet the IMO’s Tier 3 NOx emissions limitations for the North Sea and Baltic Sea.

Tom Fernihough. "Delighted to attend the naming ceremony of UECC's latest vessel the MV Auto Advance. A significant innovation in hybrid technology for a greener environment . Many thanks to UECC for their investment to a cleaner solution.”

Matt Weight. “Metro is committed to extending our zero-emission strategy as far down our customers’ supply chains as possible, which is why we welcome this positive move towards decarbonisation, by a key carrier partner.”

There is much more to come from Metro, on the environmental front, in the very near future which we will continue to announce as we roll out further initiatives with our partners and within the organisation. This is beyond a focus – it is our mission to ensure our customers have the slickest and most environmentally creative supply chains available at any time, regardless of the external influences.

To learn more about our commercial/industrial solutions contact Tom Fernihough, or Matt Weight for our automotive solutions and Simon George for our ECO/MVT, carbon measuring and offsetting solutions. We have the end to end movement of the most valuable cargo covered - with complete visibility and ability…

Schedule reliability and port congestion in decline

Nov 2, 2022 | China, Sea, Supply Chain, United States

The latest, market leading source, Sea-Intelligence schedule reliability figures show a slight decline of 0.7% in September to 45.5%, which is the first fall since reliability began to trend upwards in April and follows the year’s largest reliability increase of 5.8% in August.

The average delay for late vessel arrivals has been dropping consistently since the start of the year and In September improved once again, albeit slightly, dropping by -0.10 days, bringing the average delay to 5.81 days and is the second consecutive month that the delay has dropped below the 6-day mark since April 2021. Pre-Covid pandemic situation this would have been deemed completely unacceptable. But transits and measurements have changed over the last few years and many traders would like to slow down their products in transit in the current global environment so it is actually, by some businesses adjusting their supply chains in line with current consumer demand, considered a benefit we have observed.

With schedule reliability of 53.2%, 2M was the most reliable carrier in September 2022, followed by CMA CGM with 45.5%, with another four carriers recording schedule reliability of 40%-50% and the remainder at 30%-40%, or lower, it has been widely reported in the trade news.

Yang Ming recorded the lowest schedule reliability of 35.1%. In September 2022, once again, most of the carriers were very close to each other, with the difference between Yang Ming at the bottom and CMA CGM at second, a little over 10 percentage points.

Despite schedule reliability improvements global port congestion remains an issue with ~11% / 2.8m TEU of capacity tied up due to bottlenecks, labour shortages, industrial disputes and other post-pandemic disruptions.

The overall trend is on a downward trajectory, as congestion is starting to ease across the main hotspots in the US and Europe, though there was a small increase in vessels waiting at Chinese ports, due to weather related issues and isolated COVID lockdowns.

US East Coast port congestion is improving, with Savannah remaining the most congested port with 33 vessels recently waiting at anchor. US West Coast congestion is now almost cleared with only a handful of vessels waiting in the San Pedro Bay area.

The situation at the main European ports remained largely unchanged, although dockworkers at the Port of Liverpool began their second strike last Monday and are set to continue through this week, and with no agreement reached with the Unite union at Felixstowe, there is a risk of further industrial action at either port before Christmas.

We are working closely with our offices and network partners to monitor the situation throughout US and European ports, with contingency plans to ensure product is delivered to market, without delay, until congestion finally subsides.

To learn how we can help you avoid disruption and port congestion, or to request our regular ocean market report, please EMAIL our sea freight director, Andy Smith, who can advise on the best solutions for your ocean supply chain.

The freight market is changing every week, across all modes – we have the latest intel and will share our recommendations on the coming months and into the New Year of 2023 – a NEW challenge approaches. You are in safe hands to ensure you have the options available to achieve your future plans. Across the board we try to future proof all aspects of global trade to ensure that you achieve, as an agile leader and ambitious partner to your business.