Container lines cut services over congestion

Businesses look set to pay higher transport costs and wait longer for goods after a leading consortium of container shipping lines cut back on direct calls at the main UK ports to avoid severe congestion.

The move, by the Grand Alliance of container lines, is one of several to cut down on visits to congested European ports. The cuts have fallen particularly heavily on the main gateways at Fel-ixstowe and Southampton.

Goods are instead being trans-shipped between mainline, long-distance vessels at continental ports such as Rotterdam then brought on smaller, feeder ships, often to minor ports such as Immingham. UK businesses receive the goods more slowly and pay for the extra handling and the smaller ships’ higher costs. Extra handling fees could amount to €150,000 (£108,000) for a 500-container shipment, if the Continental port charged €150 a container for the two extra handling moves required.

However, the main owner of Southampton Container Terminals said some traffic was also shifting back to the UK from congested mainland ports and port developments would solve the problem.

Others in the ports sector argued that the lines were exaggerating the problem and the UK was suffering partly because of problems at overstretched ports elsewhere. Ports throughout Europe and in some parts of Asia are struggling to cope with volumes of container imports from Asia – up 18 per cent on last year.

Adolf Adrion, a member of the board of Hapag-Lloyd, the world’s number five container line, told journalists last week that one of the Asian services of the Grand Alliance of Hapag-Lloyd, Japan’s NYK Line, Hong Kong’s OOCL and Malaysia’s MISC now left Southampton out every second visit to northern Europe. Because most container services operate a weekly service, Southampton is probably served only every fortnight.

Mr Adrion said that for three months in a row every second Grand Alliance service calling at Southampton had been kept waiting for three days before it could be handled. “Every second vessel we then decided to pass by and discharge the UK cargo in Antwerp,” he said. “I think we were patient quite a long time but if it continues and you don’t see light on the horizon, you discuss it and change. We were not the only line suffering. It was the whole industry.”

But Patrick Walters, managing director for Europe and North Africa of Dubai’s DP World, owner of 51 per cent of Southampton Container Terminals, insisted Continental congestion and extra costs were also pushing lines to restore direct UK calls. DP World was expanding Southampton and developing a container port able to handle direct calls at Shellhaven on the Thames, he added.


Source:FT.com