Date: 16.02.2023

More car makers need containers as RoRo crisis grows

We reported last month how the global shortage of RoRo capacity for finished vehicle shipments had intensified over the last two quarters on 2022, encouraging two of China’s biggest car manufacturers to order their own ships, as sales of their EVs grew in European markets, including Norway, Belgium and the UK.

While car production lines have been gradually increasing output post-COVID, the vessels that RoRo operators scrapped or laid up during the pandemic have not been replaced and the operating lines have been wary of placing new orders for vessels because of the market uncertainty and levels of investment required, which has contributed to the shortage in RoRo capacity since last summer.

Chinese finished vehicle exports grew over 50% year-on-year, topping three million units by December 2022, with demand for EVs particularly strong, contributing to the recent vessel acquisition by BYD and SAIC Motor Corp.

There are eleven new-build RoRo vessels due to join the global fleet in 2023, but they are insufficient to even satisfy half of the demand out of China, which is planning to export over two million units to Europe this year.

Wallenius Wilhelmsen, one of the biggest vehicle RoRo shipping lines, has confirmed the shortage in RoRo capacity in 2022 and that, as it is expected to continue, the line will pay special attention to how it loads its vessels, to optimise capacity.

Underinvestment in new vessels has resulted in the capacity crunch that has driven up rates on both RoRo and dual container/RoRo (Con-Ro) vessels, with light vehicle spot rates from Shanghai to north-west Europe rising by nearly 20% in January.

The container solution is increasingly popular

After a tumultuous pandemic, with sky-high rates and record-lows for vessel schedule reliability the container shipping sector’s efficiency had effectively recovered towards the end of 2022, with rates dropping and disruption largely dissipated.

Global container shipping is an attractive and effective alternative solution for manufacturers of automobiles, construction vehicles and agricultural machines, that are unable to find RoRo capacity, which is in chronic short supply, with rates increasing on all lanes. 

On the Shanghai to north-west Europe trade lane, shippers have to pay four times as much to ship on pure car and truck carriers (PCTCs) versus containers, which can carry up to four vehicles in one box and with container shipping capacity projected to be over supplied in the midterm, very competitive rates are available to OEM’s and manufacturers.

The Metro Automotive team use specialised racking systems, onto which four cars can be loaded, before being lifted into 40’ containers for shipment to and from global destinations.

Members of the Metro Automotive team are IATA/ADR/IMDG trained and accredited for the multi-modal handling of hazardous cargo, including lithium batteries and EVs, which are now considered dangerous goods.

Metro has specialised in the automotive, construction and agricultural vehicle sectors for over four decades, working with many of the most respected and established global brands, to coordinate the end to end movement of vehicles and machinery around the world.

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 knocked-down-vehicle movements.

To learn more, or to discuss our automotive capability, EMAIL Ian Tubbs.