“Marco Polo” and terminals
Observing the official itinerary and the cutoff times indicated in the first round trip, that departing from Ningbo on 24 January, as per the MSC website, it is noted that the ship does not stay in any port for longer than 24 hours. The terminal must therefore work very efficiently, dedicating itself almost exclusively to the “great ship”. The logic of this itinerary can be seen more clearly by looking not only at the ports but also the managers of the terminals visited. There appears to be a preferential relationship with the Emirates and with DP World, their arm in the global terminal industry, manager of the Jebel Ali terminal and shareholder of CMA CGM in the company GMP, which manages three terminals at Le Havre. In Rotterdam the FAL service uses the Delta Terminal of Hutchison Port Holding, in Hamburg HHLA’s Burchardkai and in Bremerhaven the Eurogate, where MSC has its base. Malta Freeport Terminals Ldt is run directly by CMA CGM. Preferential relations with a terminal are indispensable since a megacarrier requires the simultaneous deployment of many resources (up to eight cranes working on the same vessel) and a quayside length of around 400 metres to ensure a turnaround of 24 hours. (3) This leads one to believe that, in the future, the spread of ULCCs will force an acceleration of the trend for terminals to be run directly by operating companies. (4) As Zeno D’Agostino, general manager of Bologna’s Interporto and former general secretary of the Port of Naples, wrote: “since handling a giant ship in the port requires considerable organisational capabilities, and since the need to make port cost savings minimises the number of calls made by a single ship, the consequences will be for companies to focus on slow services, more frequent than is the case today, and on few ports, possibly visited by a single company. Naturally these ports will have to provide an organisation and a handling speed better than current levels. In practice, it will be necessary to make up in the port the time lost at sea, savings on moorage and stay costs by reducing the number of calls and cutting down loading and unloading times (and raising the productivity of cranes). This is a difficult goal to achieve in most ports (especially in Italy), the result being that instead of generating economies of scale for terminal management, megacarriers will probably bring about ‘diseconomies of scale’” (5) This problem is clearly seen in an interview with a manager from Bromma, the Swedish firm that produces spreaders. In order to be able to quickly load and unload a megacarrier, in 24 hours or so, it is necessary to attain productivity levels of 50 moves/hour per crane (today we are at 30-35). With the introduction of tandem-lifts it is now possible to lift two containers at the same time, and thus double productivity, but, even without considering the fact that as from 2017 it will become mandatory to weigh the container before it is taken aboard, and that tandem-lifts cannot currently weigh the two containers separately, the problem that is difficult to solve comes after the container is on dry land, in the space of time between its grounding and its placement in the yard, an operation that takes much longer than that needed to take it from the ship’s hold: the biggest challenge will be on the ground — the “horizontal transport” of containers from ship to quayside and beyond. It will thus be necessary, the interviewee adds, to study new terminal layouts. The solution that appears to be the most appropriate at this point in time is that of “horizontal” transport using automated vehicles (AGV), eliminating operators working the van carriers. This solution is now being tried out at HHLA’s Altenwerder terminal in Hamburg and at the APMT of Maasvlakte 2 in Rotterdam. (6) This is the move towards robotisation, which requires major investments. This scenario forms part of a situation in which earnings are ever decreasing with container work, operators of the cluster say, in large terminals as the rise in volumes is accompanied by a drop in operating revenue. (7) UNCTAD acknowledges that the economic situation of ports is endangered by naval gigantism in the conclusion of its latest report on maritime transport. (8)
‘Marco Polo’ and transit times
The transit time, 33 days westbound and 43 days eastbound, should be compared with those recorded ten years ago by ships of 6/7,000 Teu, which called at more ports. Up to 2007 the duration of a roundtrip for a Far East-Northern Europe service was 8 weeks, today it is about 11 weeks. (9) The maximum allowed speed – 24 knots – is deployed only in situations in which there are serious delays to be made up, otherwise it is all slow steaming and super slow steaming. While for ports like Le Havre this is a service with the best transit time for northern and central China, for the two German ports and for Rotterdam a transit time of 40 days to arrive at Ningbo, while still having to do a transhipment to Shanghai and southern China, is not exactly an exciting prospect. It means, for instance, for a German producer of solar energy control systems, that its product, loaded in Hamburg onto the “Marco Polo”, arrives at its destination in southern China after about two months. (10) The economies of scale (lowering the unit cost) imply some constraints, primarily a high load factor. The “big ship” must “drain” its cargo along the main port ranges of the planet. For the Mediterranean and southern Europe a special service is required, deploying smaller vessels, from 7/8,000 to 10/11,000 Teu, at this point in time. The service dedicated to the Med area will however always be offered too by calls to a transhipment port offering services for Northern Europe. Freight volumes available in the Med area should thus always be calculated “gross” of the calls of services for Northern Europe. The reason why a Mediterranean port might aspire to receive the attentions of a ULCC is the concentration of goods being exported or imported. If a set of neighbouring ports along the same range, like the five ports of the Ravenna-Rijeka range in the Northern Adriatic, raise capacity excessively at the same time, all they do is create the conditions for the dispersion of goods, thus they become ever less attractive for megacarriers. Then we must agree on the term “big ship”, there is quite a difference between a full containership of 8,000 Teu and one of 14,000 Teu. Our ports thus appear to be a little outside the range of ULCCs. Even so, many Presidents of port authorities and many mayors dream of their arrival, hoping to appear one day on the front page of the local rag next to the captain of the “Marco Polo”. Perhaps this is also the dream of those putting forward a Regulatory Plan for the Port of Genoa, intended as being made to measure for 22,000 Teu vessels that still do not exist. This appears rather to be the ravings of this or that engineer.
3. For Algeciras APMT has ordered from Chinese ZPMC cranes with arms 72 metres long capable of working on 25 rows of 10 high cube containers on deck and 19 under cellar. APMT buys cranes for Algeciras, in “Lloyd’s List”, 31 January 2013. Cranes of a similar capacity have been installed in DP World’s London Gateway terminal.
4. In keeping with the financial situation of companies. In order to renegotiate its debt with banks, CMA CGM has recently had to sell for 400 million dollars 49% of its company Terminal Link to the Chinese State-controlled group China Merchants Holding International (CMHI), see CMA CGM sells stake in Terminal Link in “Lloyd’s List”, 28 January 2013. The sale of further stakes to Turkish businessman Yildirim and to French sovereign fund FSI has brought the group back into the black, with a return on invested capital of 10.6%, Janet Porter, CMA CGM announces bumper 2012 results, 19 March 2013.
5. Letter to the author dated 22 January 2013.
6. Roger Hailey, Start spreading the teus, in “Lloyd’s List”, 11 March 2013.
7. See HHLA of Hamburg accounts given by “Informare“ on 7 February 2012.
8. UNCTAD, “Review on maritime transport, 2012”, p. 92. The same view (giant ships benefit shipowners but not ports) was voiced by some participants at the Asian Conference of terminal operators: Panelists at the TOC Asia conference say that carriers enjoy most benefits from big ships, not ports, on “Lloyd’s List”, 13 March 2013.
9. Michael Tasto, Neue Schiffe passen kaum in alte Fahrpläne, on „Deutsche Verkehrs- und Logistik Zeitung“ (DVZ), 6 December 2012. The author, an economist at the ISL of Bremen, argues that the reduction in speed is such as to engender the danger of damaging the engines and make it necessary to include new ships, raising costs for the entire service. One solution could be to increase the number of ports called at, in particular in the North Sea, but the cost of the operating cycle would be greater than the cargo opportunities on offer. A typical vicious circle is apparently formed with slow steaming.
10. Perhaps for this reason in the FAL 1 service leaving Southampton on 25 February, voyage code FL943E, Port Kelang was given as the final port visited, yet the vessel apparently departs again on 13 April from Ningbo, with voyage code FL944W. The itinerary does not appear to have changed.