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  • Digesting the impact of mega ships and alliances at TOC Europe 2014

  • Amid warnings of a growing disconnect between trade fundamentals and ocean carrier strategy, cargo owners, 3PLs, analysts and ports will gather at the 39th annual TOC Europe event to debate the new logistics landscape created by huge changes in shipping.

    London, 24.04.2014 – With over 100 vessels of 10,000 TEU and above due for delivery this year and next, and more orders in the pipeline, the global liner shipping industry has an enormous challenge on its hands to manage the process of change. “Operational alliances and vessel sharing agreements will increase out of necessity on all trade routes and the day of the independent operator is over”. That’s the view from Drewry, one of the key industry analysts joining major shippers, logistics providers and ports at TOC Europe in London this 24-26 June to assess the supply chain fallout from the huge scale change in container shipping.

    “The combination of economic uncertainty and oversupply of capacity means that the container shipping market will remain unstable and freight rates very volatile for the foreseeable future,” says Martin Dixon, Director and Head of Research Products at Drewry. Mr Dixon will speak on the opening day of the TOC CSC Conference alongside fellow industry analyst Andrew Penfold, Director at Ocean Shipping Consultants (OCS), and senior shipper and 3PL representatives from Agility, International Paper, Michelin and Global Shippers Forum (GSF).

    While mega-alliances such as P3 are designed to bring stability to the market by improving tonnage management, analysts are sceptical about their immediate ability to counteract the current and forecast overcapacity. As a result, cargo owners “can anticipate a prolonged period of low freight rates”, says Andrew Penfold of OCS. But will this be enough to compensate shippers for continued skipped sailings, more transhipment and other negative service factors?

    Trenchant views on this topic are anticipated from shipper representatives including Neville Scowen, Overseas Transport Manager at International Paper, in his comments on “Have shipping lines and terminals forgotten the customer?”, and from GSF Secretary General Chris Welsh, among others. The international shipper group has been keeping a close eye on alliance developments and liaising with the regulators about their potential anti-competitive aspects.

    But the impact of mega-ships and alliances perhaps will be felt most keenly by ports and landside transport. “Larger ships are challenging ports, with fewer vessel calls but many more container moves per call, with the potential for landside congestion both within terminals and for hinterland transport,” says Drewry’s Martin Dixon.

    “Alliances will shake up European port dynamics and no-one knows yet where the sticks will land,” adds Andrew Penfold of OSC. “Terminal consolidation and size limitations of existing capacity are already shifting the current market positions of terminal operators in Antwerp, Zeebrugge, Rotterdam and this wave will hit many other ports soon,” agrees Paul Jakob Bins, MD Benelux & France for the Euroports group. Mr. Bins speaks on day 2 of TOC CSC, focusing on inland logistics flows and connectivity.

    Vessel cascading also gives cause for concern well outside the major trade routes, as supply side pressures prematurely displace bigger ships into ports in Africa, Latin America and other emerging regions. “This could all force significant change to port networks, leading to more feedering and local transhipment,” adds Mr. Penfold.

    Port of Rotterdam, Peel Ports, ICTSI, Duisport, Euroports, TIL and GrupTCB are among the key port and terminal operators who will be speaking to the new challenges, both at the TOC CSC Europe conference and in the parallel TECH TOC conference, focusing on the practicalities of port and terminal operations.

    “What’s happening in shipping today looks set to drive fundamental changes in the global container transport network as we know it today,” says Rachael White, Content Director at TOC Events. “A fantastic line-up of speakers has been drawn from all parts of the supply chain to tackle the issues from macro to micro at this year’s TOC Europe event.” 

    www.toceventseurope.com

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