European feeder operators face growing obstacles
Operators of feeder shipping services in Europe say their operations are hindered by red tape, worsening port congestion and deep-rooted industry practices that discriminate against feeder and short-sea shipping lines.
Eric Petersen, sales and marketing manager of Denmark-based UniFeeder, told the Coastlink 2005 conference in Newcastle, U.K., Tuesday that his company faces numerous obstacles in Europe, despite the official government policy of encouraging short-sea shipping.
When moving a container within the port of Rotterdam between the APM terminal and the common-user ECT terminal, the feeder carrier has to complete time-consuming customs forms because the two facilities fall under the scope of different customs districts, Petersen said. “It’s unbelievable they cannot find a better system!” he said.
Port rules also force feeder operators to use and pay for pilots even when moving the ship between two terminals in the same port, he added.
Intra-European container feeder operators, which work as subcontractors to the large deep-sea container shipping lines, complain that deep-sea ships are often running behind schedule. This has “a huge impact” on feeder operators, Petersen said. Such delays force feeder operators to choose between leaving the port without the expected feeder cargo or incurring extra costs waiting for the mothership,
At peak times, ports handle deep-sea ships before they handle feeder vessels, he added. Berthing windows for feeder operators “get a low priority, and we are suffering,” he added.
As Europe’s biggest feeder operator handling annual volumes of 1.2 million TEUs, UniFeeder said it is has seen enormous increases in feeder traffic, but suffers from congestion and delays in ports such as Rotterdam, a big feeder transshipment hub.
“It’s harming our business and our customers’ business,” Petersen said.
Problems are compounded when, because of port delays, UniFeeder has to call during a weekend at European ports where port labor is either not available or prohibitively expensive due to weekend overtime payments.
Mark Bennett, general manager of operations at Geest North Sea Shipping in the United Kingdom, a short-sea carrier, told the conference that the lack of sufficient port capacity in the United Kingdom is “putting additional pressure on existing facilities.” He cited delays in expanding the port of Hull and the lack of intermodal rail connections at that northeast U.K. port’s riverside terminal.
Like deep-sea carriers, feeder and short-sea carriers have also seen fuel and vessel charter costs soar in the past year. Petersen, at UniFeeder, said one way to mitigate cost increases is to lower the frequency of service and raise volumes per port call, but this is not favored by its customers. UniFeeder’s new feederships have capacities of 850 TEUs.
Formed last year to promote short-sea and feeder shipping in Europe, the Coastlink association wants to highlight regulatory rules that impede this industry. It plans to introduce a brokerage service to match empty vessel slots and cargoes that can use coastal shipping.
Europe’s short-sea shipping industry, more developed than in North America, is regarded favorably by European policymakers.
The European Commission provides subsidies for major international transportation projects that can take freight off the road in Europe. But shipping executives at the conference said the conditions and procedures are too laborious to make applications for subsidies worthwhile. None of the major short-sea services benefits from subsidies.
“We don’t believe we want to wait for political solutions,” said David Cheslin, chairman of Coastlink and director of Dunelm Public Relations.