European Ports Stuffed with Congestion

The Port of Hamburg is among several European ports currently experiencing congestion issues.

A summer labor shortage and longer processing time for larger ships is creating congestion around European port cities and forcing ocean carriers to levy surcharges on tardy shippers.

Europe's top ports — Rotterdam, Antwerp, and Hamburg — are among several cities dealing with congestion issues. Europe is constrained by space, with dense road networks, heavy traffic, and a lack of rail capacity, infrastructure, and utilization. Consequently, many cities serve as feeder ports for short-sea shipping throughout the European Union — in addition to import and export destinations — which only increases traffic on and off terminals.

Water and road transportation offer little latitude, so ports are dependent on technology and resources to speed freight flows. And, as containerships continue to get bigger, ports need to accommodate longer loading and unloading times.

Rotterdam started tackling the problem a few years ago when it unveiled a system that scans cargo on moving trains, rather than unloading carloads. The Port of Rotterdam uses high-power X-ray scanners to vet densely packed cargo in trains moving at speeds up to 35 miles per hour. As a result, Dutch Customs can inspect nearly 200,000 rail containers per year, or a single 40-foot container in eight-tenths of a second.

As larger ships continue to come online, the challenge for European ports and countries is identifying how to better integrate and utilize rail freight transport to speed throughput, and address congestion and capacity issues.

Ocean Carriers Seek Capacity Balance, Raise Rates

Beset by deteriorating freight volumes and overcapacity, ocean carriers have been pulling up anchors in search of ways to optimize asset utilization and plug leaking profits. They have laid up vessels, reconfigured services and lanes, and entered into alliances to help offset market volatility. Those efforts seem to be paying off as shippers begin to navigate another peak season.

In August 2014, Maersk Line raised freight rates on routes from Asia to northern Europe by $450 per 20-foot container. Other ocean carriers likely will follow suit.

Leading steamship lines in the Asia-U.S. trade have similarly called on carriers to raise rates by at least $600 per 40-foot container (FEU) due to sustained third-quarter cargo demand across major commodities.

Carriers need a rate structure that encourages investment, draws equipment back into the market, covers rising inland transport and cargo handling costs, and enables the broadening of service offerings, reports the Transpacific Stabilization Agreement (TSA), a research and discussion forum comprising 15 of the world's leading container shipping lines.

"Given current rate levels, TSA members believe that $600 per FEU is the minimum needed to meet those objectives," says Brian Conrad, TSA executive administrator.

Freight rates plunged to unprofitable levels for most carriers in 2013 as a result of overcapacity in the market.

http://www.inboundlogistics.com/cms/article/global-logistics-august-2014/