New round of RONS will help NZ catch up

Press Release – Road Transport Forum

Road Transport Forum Chief Executive Ken Shirley has welcomed the National Partys announcement of a new round of roads of national significance.21 August 2017

New round of RONS will help NZ catch up
Road Transport Forum Chief Executive Ken Shirley has welcomed the National Party’s announcement of a new round of roads of national significance.

“The fact is that New Zealand still faces a major transport infrastructure deficit,” says Shirley. “These new RONS will go a long way to helping us catch up, while improving resilience and safety.”

“Of course, there will also be the usual detractors to these projects, but it is worth reflecting on the success of the first round of RONS and the positive impact they are already having on communities and the economy.”

“I am glad that both major parties have now made formal commitments to finding an enduring solution to the Manawatu Gorge, it is a vital freight route that links the eastern and western sides of the lower North Island.”

“The East West Link is a similarly critical project to freeing up freight movements around Auckland, says Shirley. “But currently there is a lot of uncertainty with it before in the Environment Court. It is encouraging that the political commitment is there to see it through however.”

“The Katikati to Tauranga project is absolutely necessary from a safety point of view, just recently that road was identified as one of the most dangerous in New Zealand. If we are serious about getting the road toll down we must address such routes.”

“Finally, the extension into Northland with the Wellsford to Whangarei route is a natural progression to further realise the potential of the Northland economy and improve its connectivity to Auckland.”

“The road transport industry looks forward to the certainty of other political parties committing to these projects also, they are far too important to be treated as political footballs,” says Shirley.

RTF is joining with a number of other transport organisations including the AA, the Chartered Institute of Logistics and Transport, New Zealand Shipping Federation and Bus and Coach Association to host the Election 2017 Transport Summit at Te Papa tomorrow. This is a great chance to hear directly from the political parties on their transport policies and quiz them on issues important to the broader transport sector. Information and tickets are available at www.transportsummit.org.nz.

Cargo containers lost at sea are hard to count, track

About 10 days ago, a cargo ship caught in rough swells off the Brazilian coast lost 45 shipping containers.
Video on social media shows fishermen in small boats scavenging for whatever they could find from the containers, some of which apparently burst when they hit the water, according to a BBC report.
Among the loot: air-conditioning units, bicycles, clothing and hospital equipment.
Such incidents, while relatively rare, do happen now and then.
Nearly two years ago, in October 2015, all 33 crew members, along with 391 containers and some trucks and trailers, were lost when the El Faro met Hurricane Joaquin in the Bermuda Triangle.
Two months later, a ship en route from Oakland, Calif., to Seattle lost a dozen 40-foot containers just outside of the Golden Gate Bridge. Most were empty, but some carried Styrofoam insulation and plastic crates that rolled up onto beaches, according to www.sfgate.com.
When millions of Lego pieces lost in a 1997 container-ship incident began washing up on English beaches, the conventional wisdom was that about 10,000 containers a year fall overboard , a figure often cited in reports about such losses over the years.
“It’s an issue that’s really flown under the radar,” said John Kaltenstein, an Arizona-based senior policy analyst with Friends of the Earth. “This is an issue that hasn’t been tracked properly, and I think it’s one of those that could use more scrutiny.”
As container ships continue to grow in size – the Port of Virginia is about to welcome its first vessel able to carry 14,000 containers measured in standard, 20-foot units – it’s hard not to think about the unthinkable.
Six years ago, the World Shipping Council, a Washington-based trade group whose members account for about 80 percent of global ocean-carrier capacity, got on the case.
Beginning with a survey in 2011, the group asked its members – which include major carriers such as Maersk Line, Mediterranean Shipping Co. and CMA CGM – to report the number of containers lost overboard for the preceding three years.
It found that over the total nine-year period covered in its surveys, from 2008 through 2016, an average of 568 containers were lost at sea each year.
That figure, however, doesn’t include catastrophic events, which the council defines as those that claim 50 or more containers. Factor them in, and the average rises to 1,582 a year.
Nearly two-thirds of the containers lost in that time period were linked to catastrophic accidents, the council states. Among them: the complete loss of the MOL Comfort in 2013 in the Indian Ocean, with 4,293 containers, the worst container-ship loss to date; and the grounding of the M/V Rena off New Zealand, when roughly 900 containers were lost.
Last year, ocean carriers moved about 130 million containers packed with cargo, with an estimated value of more than $4 trillion, the council noted, and containers lost overboard represent about one-thousandth of 1 percent of that total.
Maersk Line, the biggest ocean carrier in the world, moved 13.2 million full containers last year, of which 23 were lost overboard, Katherine Mosquera, a spokeswoman, said in an email.
Among an array of things the company is doing to prevent future losses: an “increased focus on route planning, especially in poor weather conditions.”
Kaltenstein said that while he applauds the industry’s efforts to better account for container losses, he has some questions.
Ideally, the statistics provided would offer a fuller picture of what’s going on and where, he said: “What we’re seeing is really composite data,” with no information about the date and location of the losses, the number of containers lost per incident or their contents, or which company was involved, among other things.
Kaltenstein also noted that the World Shipping Council had to extrapolate from its members’ data to get an estimate of the losses from the 20 percent of ocean-carrier capacity the group doesn’t represent, some of which may be operated by carriers that don’t have the same standards as the council’s membership.
Even if its average figure of more than 1,500 containers lost per year is on target, he noted, over the course of a decade that’s still 15,000 containers.
In late February 2004, the Med Taipei, en route to the Port of Los Angeles, lost 24 containers – 15 of them in the Monterey Bay National Marine Sanctuary south of San Francisco.
In June 2004, scientists with the Monterey Bay Aquarium Research Institute found one of them – holding 1,159 steel-belted car tires – resting upside down on the seafloor, at a depth of about 4,200 feet.
Using proceeds from a resulting legal settlement, the marine sanctuary has turned the container into a kind of science experiment, monitoring the impact site to track decomposition rates along with “potential impacts over time of steel containers and contents, as well as the recovery rates of natural habitats in the deep seafloor,” according to the sanctuary’s website.
“Our lost container is really the only shipping container in the world that’s being studied in the deep over time,” said Andrew DeVogelaere, research director for the Monterey Bay National Marine Sanctuary.
He questions the accuracy of the often-quoted figure of 10,000 containers lost a year, but he also wonders whether surveying companies that have an interest in showing lower numbers is the best way of getting to the truth.
“I don’t know that anybody knows what the true number is, but I’m glad that people are working on firming that up,” DeVogelaere said.
He knows this much, though: “When they are lost, they’ll sit on the sea floor for hundreds of years. It’s a big deal.”
He terms lost containers another form of marine debris and says that the impact on organisms and communities in the deep sea is still being identified: “We don’t even know what the names of many of the deep-sea organisms are or their role in the ocean ecosystem.”
Michael McDaniel is a maritime attorney and principal of a Los Angeles-based law firm whose clients have been involved in such disasters as the El Faro, the MOL Comfort and the M/V Rena.
One of the questions commonly raised at his firm is how many lost-container incidents go unreported. Among other reasons, shipping companies want to avoid the regulatory entanglements to which they can lead, he said.
“Some incidents just aren’t reported, you know, especially in some parts of the world,” he said.
Curtis Ebbesmeyer is perhaps the granddaddy of those with a keen interest in lost-container incidents worldwide.
He has tracked them for decades and oversees a global network of beachcombers.
A Seattle-based oceanographer with 50 years of experience, he remembers when thousands of Nike athletic shoes began to wash up on Pacific Northwest beaches about 25 years ago.
“Each Nike shoe has a serial number, and Nike actually cooperated with me, through their marine department, to figure out what ship it came from,” Ebbesmeyer said. “That’s a very unusual thing.”
Typically, when container debris washes up on a beach, there’s no way to identify the source, he said.
Ebbesmeyer takes credit for first throwing out the 10,000 figure decades ago and notes that the World Shipping Council survey results cover a period that began less than 10 years ago.
If there were a way to track the data back to the 1980s and ’90s, he believes his estimate would stand up.
In any case, the larger issue isn’t really the number of containers, he argues, so much as what’s in them and finding a way to hold accountable those responsible for lost goods that end up on shorelines worldwide.
“It’s almost like, if it goes overboard, it’s out of sight, out of mind,” Ebbesmeyer said. “We have massive numbers of people cleaning up beaches, but they can’t tell where it comes from.”
A single container can carry 5 million plastic shopping bags, which if lost at sea could itself become a catastrophe, Ebbesmeyer said.
“It’s a very deep and dark topic,” he said. “But I must compliment the industry; they’re doing better and better.”
Source: The Virginian Pilot

The World’s Shipping Companies Are Going Super-Sized

The hulking container ships that transport sneakers, bananas and Barbie dolls around the world keep getting bigger. So are the companies that own them.

A massive consolidation is underway in the $500 billion global industry and the survivors now enjoy big economies of scale and increased demand, one year after excess capacity caused the sector’s worst-ever crisis — the bankruptcy of South Korea’s Hanjin Shipping Co.

Hanjin’s Montevideo container ship near the Port of Long Beach in Sept. 2016.
Photographer: Tim Rue/Bloomberg

Asia’s largest container line, China’s Cosco Shipping Holdings Co., last month said it would pay more than $6 billion for rival Orient Overseas International Ltd., owner of the world’s biggest vessel — a carrier longer than the Empire State building. Denmark’s A.P. Moller-Maersk A/S is in the process of buying a German competitor and boasts its own fleet of mega ships, including one that can carry about 180 million iPads.

These super-sized shipping companies wield much more pricing power over manufacturers and retailers like Wal-Mart Stores Inc. and Target Corp. The five biggest container lines control about 60 percent of the global market, according to data provider Alphaliner. Shipping rates are climbing, and an index tracking cargo rates on major routes from Asia is about 22 percent higher than it was a year earlier.

“Container shipping is now a game only for big boys with deep pockets,” said Corrine Png, chief executive officer at Crucial Perspective, a Singapore-based transportation research firm. The rising market concentration will “give the liners greater pricing and bargaining power,” she predicts.

Hanjin’s collapse, in August last year, upended the industry in much the same way that the bankruptcy of Lehman Brothers roiled the financial sector during the 2008 crisis. One of the world’s largest shipping firms at the time, Hanjin faced a cash crunch as supply outstripped demand in the industry, weakening pricing power and profits for carriers. It is now in the process of being liquidated after a South Korean court declared it bankrupt in February.

“Since the demise of Hanjin Shipping, flight to quality has become more noticeable in the container shipping business,” said Um Kyung-a, an analyst at Shinyoung Securities Co. in Seoul. “That’s why the market is becoming more and more dominated by top players with big ships and those that don’t have could become more and more obsolete.”

The growing use of mammoth ships is key to the turnaround. Companies who own them are able to deploy fewer vessels and move more cargo on a single journey to benefit from higher rates, said Um.

By her estimates, there are now about 58 of these huge carriers worldwide that can transport more than 18,000 containers, and the number is expected to double in two years. About half the new vessels will be added by the biggest firms.

Higher Demand

The excess supply that derailed growth last year hasn’t completely disappeared as new entrants expand and as older vessels still remain. Capacity in the container shipping industry is expected to grow 3.4 percent this year and 3.6 percent in 2018, according to Crucial Perspective.

Still, recovery in demand seems to be on track. After posting losses in 2016, companies are seeing signs of business picking up. A.P. Moller-Maersk, which owns the world’s biggest container shipping business, said in May that it has seen strong demand toward the end of the first quarter. Cosco said earlier this month that as conditions improve it expects to report a first-half profit of about 1.85 billion yuan ($276 million), compared with a loss a year ago.

“We forecast global demand growth to outpace supply growth in 2017-2019,” Hong Kong-based analyst Andrew Lee at Jefferies Group LLC said in a note last month.

Holiday Season

Earlier this year, Maersk, South Korea’s Hyundai Merchant Marine Co. and other shipping lines reached agreements with their customers to raise annual rates from May for cargo headed from Asia to U.S. stores like Wal-Mart and Target. Retailers in the U.S. usually increase inventory during the third quarter, ahead of the year-end holidays, and Lee said freight rates are expected to rise further as the peak season for the container shipping industry kicks off.

For retailers, “if container costs go higher, obviously it’s a headwind,” said Brian Yarbrough, an analyst at Edward Jones. “Retailers have three choices: They can pass that through to the customer or find efficiencies to offset that within the organization, or they come out and say gross margins will be pressured due to higher freight costs.”

BIG SHIPPING DEALS:

  • In 2015, Cosco Group and China Shipping Group announced a merger to create Asia’s biggest container line, Cosco Shipping Holdings Co.
  • In 2016, CMA CGM SA bought Singapore’s Neptune Orient Lines Ltd.; Maersk agreed to buy Hamburg Süd and Japan’s three shipping companies agreed to consolidate their container shipping businesses.
  • In 2017, Hapag-Lloyd AG completed its acquisition of United Arab Shipping Co. and Cosco Shipping offered to buy Orient Overseas International of Hong Kong.

Ship energy independence from multimode energy harvesting

It is now becoming clear that the appalling emissions from ships that cause global warming and local injuries can be virtually eliminated. A large ship emits the carbon dioxide of 75, 000 cars, NOx of two million cars and particulates of 2.5 million cars (DNVgl) plus large amounts of SOx, something little seen with cars. Now think what a combination of Flettner rotors, Airborne Wind Energy (AWE), sails with multi- mode energy harvesting, reinvented photovoltaics and wave power will do.

Flettner rotors on ships – typically four huge columns – typically exploit the fact that an electrically rotated cylinder in a wind creates thrust. It has better tolerance of wind direction than sails. It could be complementary to AWE which creates electricity using tethered drones or cloth kites way above the ship at 200-1000 meters where winds are four times stronger and more continuous. Photovoltaics as solar road technology applied to large ships can also supply up to MW level particularly if increasingly affordable gallium arsenide is used. All three will be complemented by wave power lifting the ship to reduce drag, a technique that is newly viable. Each gain is multiplicative and the complementary intermittency could lead to a greatly reduced need for batteries and possibly the complete elimination of them.
In 2016 Norsepower’s successful Flettner sea trials showed potential for 20% fuel savings of up to 20% on favourably windy routes. Viking Line plans on reducing ship fuel consumption by 15% or more.

Norsepower and the world’s biggest shipping company, Maersk, to start testing Flettner in Maersk ships starting 2018. Aim is 7-10% of fuel cost leading up to 300000€ savings in big tankers. There should be similarly impressive percentage reduction in emissions.
The world’s first conference on “Energy Independent Electric Vehicles” takes place 27-28 September at the Technical University of Delft in the Netherlands. Exclusively on the subject this IDTechEx event will embrace the commercial opportunity and technology roadmap including ship energy independence.

Naval DC describes its many commercially successful large boats that are energy independent and where it is headed. Three organisations present their AWE at 30-100 kW with potential to provide multiple 1MW systems on ships – KiteNRG of Italy, Kitepower of the Netherlands and Kitemill of Norway. Solaroad TNO of the Netherlands presents solar roads suitable for ships that could produce hundreds of kilowatts potentially complementing solar sails that make electricity from sun, wind and rain developed by presenter the University of Bolton in the UK. All that could exceed the megawatts needed and make MWh batteries on ships a thing of the past. Toyota of Japan gives a keynote.

Breakthroughs in enabling technologies such as the necessary electric motors and power electronics are also announced and explained. The event is staged by analyst IDTechEx which has the only comprehensive reports and consultancy on EIVs and enabling technologies such as structural electronics, triboelectric and 6D motion energy harvesting and extreme lightweighting including a report, Electric Boats and Ships 2017-2027.

There are six optional Masterclasses on EIVs and their technologies on September 26 and 29 and a small exhibition and viewings. Partnering the event is TU Delft which has supported more record-breaking solar racers on land and water than anywhere on Earth and researches wind and solar power for vehicles, their power electronics, photovoltaics and dielectric elastomers making electricity from waves.
Source: IDTechEx

Why you should visit the Panama Canal

Of all the mind-bending facts and figures about the expansion of the Panama Canal, the one that surprises me most is that this isn’t the first time it’s been attempted. Twenty-five years after the canal opened in 1914, work began on a second set of locks and approach channels to accommodate America’s larger warships. The project ran for several years before being cancelled after World War II.

In 2007, Panama decided to have another crack at it. The plan was to build a new set of larger locks at both ends of the canal to create a third lane of traffic (the existing locks already allow simultaneous passage in both directions), thereby allowing bigger vessels to use this handy 77-kilometre shortcut between the Atlantic and the Pacific.

The project was supposed to finish in 2014 to coincide with the canal’s 100th anniversary. However, disputes and delays meant it overran by almost two years. Finally, on June 26, 2016, the Cosco Shipping Panama container ship became the first vessel to use the new locks, paying the tidy sum of $US575,545 for the privilege.

The canal has two visitor centres where you can learn more about this engineering marvel. Most people visit the one at the Miraflores Locks, 10 kilometres outside of Panama City, but I’d recommend taking the scenic Panama Canal Railway to Colon to visit the newer complex at the Atlantic end. The trip takes about an hour and offers tantalising glimpses of ships transiting the canal interspersed with shipyards and bird-filled wetlands from the train’s glass-domed observation car.

Entrance to the Agua Clara visitor centre (named because the water is clearer on the Atlantic side) costs 15 balboas ($19) and includes a 12-minute video presentation plus access to an observation terrace.

Whenever I watch one of these films I feel faint from the bewildering complexity of a project of this scale. The expansion involved a new 6.1-kilometre access channel at the Pacific end of the canal, deepening and widening both canal entrances and building two sets of locks with 16 lock gates weighing more than 3000 tonnes each.

A guide shows me a video on his phone of one of the gates being manoeuvred into place by remote control – a painstaking process of inching it backwards and forwards on a bed of rollers – surely one of the most stressful parallel parks in history.

All of which raises the question: why go to all this trouble when you already have a perfectly good shipping shortcut that’s been used by more than a million vessels? Because container ships are getting bigger and Panama is missing out on toll revenue. Even though the budget for the expansion ballooned way above the initial $US5.25billion estimate, the new larger locks can handle ships with almost 13,000 containers. Plus the third lane of traffic doubles the canal’s capacity to about 30,000 vessels a year.

The toll paid is based on a ship’s weight, so that’s a compelling incentive to increase capacity. One of the highest tolls paid last year was a staggering $US829,468 by the MOL Benefactor which transited on July 1. Incidentally, the smallest on record was by Richard Halliburton who swam the length of the canal in 1928 for the princely sum of US36¢.

The new locks are 60 per cent wider and 40 per cent longer than the old ones, which means they could accommodate the Empire State Building should someone decide to pop it on a barge and ship it to Peru.

Although the new locks could comfortably house the world’s largest cruise ship (the 362-metre-long Harmony of the Seas), unfortunately there isn’t enough clearance under the Bridge of the Americas to allow it to pass through the canal.

Even though the new locks are bigger, they use less water for each transit than the old ones thanks to three vast reservoirs which recycle 60 per cent of the water from each lock chamber. A large-scale reforestation project helped offset the emissions created during the expansion and the fact that more boats can now use the shortcut should mean less global CO₂ emissions from shipping.

It takes a ship about three hours to pass through the three lock chambers, which, let’s face it, doesn’t sound like the world’s most riveting spectator sport. Yet, as I watch Shergar, a 225-metre LPG tanker, carefully make its way between the second and third chambers, I find the spectacle strangely captivating. From the observation deck I have a clear view of the length of the lock plus the gaggle of ships waiting patiently on either side.

Unlike the old locks, where ships are pulled through by locomotives, the new ones use tugs and the ships’ own engines. Each chamber raises the ship by nine metres until it eventually reaches the canal, 27 metres above sea level.

One oddity is that in certain places the canal isn’t wide enough for two Neopanamax ships (the classification of the vessels the new locks can accommodate) to pass each other. So the passage of these ships has to be carefully co-ordinated to avoid an embarrassing mid-canal stand-off (“You reverse. No, you reverse. But I’m bigger…”).

The new locks can also handle traffic only in one direction so three Pacific-bound ships are allowed through each morning then the direction is reversed in the afternoon.

I presumed the locks themselves would be off limits to visitors and protected by a ferocious curtain of security. However, at certain times of day you can drive over both the new and old lock gates and it’s worth hanging around to see them from this perspective.

Although the decision to expand the canal was approved by about 80 per cent of the voters in a referendum in 2006, the constant delays and escalating costs quickly eroded public confidence.

“During construction, people were saying, ‘It’s never going to be finished and it’s a waste of money,’” says my guide. “But now, everyone is very proud.” He smiles. “In Panama, we have short memories.”

FIVE MORE FAMOUS CANALS
Suez Canal

Originally opened in 1869, this 193-kilometre shortcut between the Mediterranean Sea and the Red Sea in Egypt is used by about 17,000 vessels a year as an alternative to the treacherous trip around the southern tip of Africa.

White Sea Canal

Thousands of Russian Gulag prisoners died during the construction of this 227-kilometre canal. Its shallow depth, however, means less than 50 boats a day now use it to get between the White Sea and the Baltic Sea.

Kiel Canal

Connecting the Baltic Sea with the North Sea, the 98-kilometre-long Kiel Canal passes through the German state of Schleswig-Holstein and saves ships a 1000-kilometre detour around Denmark’s Jutland peninsula.

Europa Canal

Originally started in the 1930s, this important maritime gateway has been extended several times and now links three rivers – the Rhine, Main and Danube – with the North Sea and the Black Sea.

Beijing-hangzhou Grand Canal

At almost 1800 kilometres, the Beijing-Hangzhou Grand Canal is the world’s longest man-made waterway. Work started on the project as far back as the 5th century BC and today the UNESCO World Heritage-listed canal connects Beijing with Hangzhou as well as linking the Yellow and Yangtze Rivers.
Source: Stuff

Ten new roads of ‘national significance’ announced by National, costing $10.5 billion

Ten new roads for the country, costing an estimated $10.5 billion, have been announced today by the National Party.

‘These are vital for the country’ – Bill English says new roads will help grow economy

Prime Minister Bill English announced the new major routes during a visit to Hawke’s Bay.

The new roading projects have been labelled the ‘next generation of Roads of National Significance’, adding to seven previous roads created in the project.

National Party Transport Spokesperson Simon Bridges said, “The time has come for the next generation of nation-building projects so today we are announcing that 10 of the country’s most important routes will form the next generation of Roads of National Significance”.

New Zealand Transport Minister Simon Bridges at a New Zealand Transport Agency event in Auckland.
New Zealand Transport Minister Simon Bridges at a New Zealand Transport Agency event in Auckland.

 

The new roads would be: 

·         Wellsford to Whangarei

·         East West Link in Auckland

·         Cambridge to Tirau

·         Piarere to the foot of the Kaimai Range

·         Tauranga to Katikati

·         Napier to Hastings

·         Manawatu Gorge

·         Levin to Sanson

·         Christchurch Northern Motorway

·         Christchurch to Ashburton 

“The new roads are expected to cost around $10.5 billion, on top of the estimated $12 billion invested in the initial seven,” Mr Bridges said.

“The chosen projects are our highest volume roads and they are a sensible and logical extension of the original seven projects. Together they will help provide a strong safe highway network that links our regions effectively with our major cities.”

“Like the first tranche, they will be funded from the National Land Transport Fund and the use of Public-Private Partnerships,” Mr Bridges said.

“The initial funding will come from our record infrastructure investment of $32.5 billion announced in Budget 2017.”

Govt sceptical of passenger rail link plan

The government is sceptical of a plan for a fast passenger rail network linking Auckland, Waikato and the Bay of Plenty.

A Regional Tilting train on Switzerland's rail network.

A ’tilting’ train on Switzerland’s rail network. Photo: Supplied

The transport lobby group Greater Auckland has proposed a $1.45 billion rapid rail service linking Auckland to Tauranga, Rotorua, Cambridge, Hamilton and Te Kuiti.

Initially, refurbished railcars would be used, but ultimately there would be high speed tilting trains similar to those used in Switzerland.

Greater Auckland said local and central government would have to help with the cost.

In a statement, the Minister of Transport Simon Bridges said the government was always open to ideas for improving New Zealand’s transport system.

But he said the Greater Auckland proposal seriously underestimated capital costs, and any new service would have to be backed by a sound business case, be commercially viable and be supported by key stakeholders.

The New Zealand Transport Agency said there were many operational matters that would need to be considered in detail to understand the implications of the proposal.

The agency said it was already investing in rail and road in the region to make transport easier.

Greater Auckland has said the costs were not large when compared with routinely-announced roading projects.

The plan has received backing from the mayors of Hamilton and Tauranga.

Car system stuffs up transport system

Up to 65 young, quality truck driving graduates come off the production line in Tauranga each year but far too few to satisfy the needs of the road freight transport industry.

“We are just meeting our area needs,” says Dean Colville of Toi Ohomai Institute’s specialist road transport training centre in Mount Maunganui.

But then, on reflection, “in fact, not even that. Because there’s a shortage of thousands”.

It’s a national problem and an historic one.

For example, the amount of freight carried on our roads has increased 60 per cent since 2000 but the number of people with class 5 licences, the big rig drivers, has increased by only 10 per cent.

“The road freight transport industry regularly contacts Toi Ohomai wanting our students but we just don’t have enough of them. And there aren’t too many students left over at the end of the 16-week course who haven’t got a job to go to straight away.”

When the students are out on work experience they get snaffled up.

“If they do half a good job they’re generally picked up or referred on to someone who needs a driver.”

That’s because it’s an ageing industry. Since 2013 road freight transport has lost 3000 drivers to retirement, illness or injury. The problem just worsens as drivers get older.

A survey three years ago found 85 per cent of 150 transport companies nationwide were short of drivers and there’s no reason to believe this has improved.

“The problem, in a nutshell, is the graduated driver licensing system,” says Dean. “The car system has stuffed up the transport system.”

A full car licence is a pre-requisite to enrol for the New Zealand Certificate in Road Transport Level 3 at Toi Ohomai.

“So they are 18 to 18 and a half years old and then there’s a six-month stand-down before they’re eligible for the 16-week course,” says Dean.

“And 6000 kids leave high school each year and the industry sees none of them because they don’t have a full licence.”

They don’t qualify to learn to be truck drivers, so the disenchanted would-be truck drivers go elsewhere to work.

Dean says the system means most new drivers are coming into system in their mid to late 20s. “Great having that maturity but we are losing most people in the 18 to 25 year range when they could be really beneficial to the industry, providing manpower that we lose year on year.”

However the pull to be part of the road transport industry is hard to shake. “And they come back eventually,” says Dean. “But most of our students are over 25 and they feel they’ve wasted several years getting into the industry they wanted to be in in the first place.”

There are a lot of initiatives aimed at resolving the problem.

Like the initiative driven by the government-led Sector Workforce Engagement Programme which aims to improve employers’ chances of getting reliable and appropriately skilled staff at the right time and place.

It’s talking with the industry and tertiary providers about the recruitment issues and how to resolve them. It’s a push that hasn’t happened in the road transport industry before.

“People are talking, people are working together and being smarter,” says Dean. But will it work?

“Truth be told, no. We are always going to have the problem of the driver licensing system. And until they change that and allow us to get younger drivers through quicker, nothing will change.”

There are other issues. “The hours and wages also mean difficulties around attracting young people to an industry that is not looked upon favourable as a career path,” says Jon Reid, national transport sales manager for freight operator GBC Winstone.

But it’s also an industry that has its attractions for young people. Ask Dean Colville.

“A lot of it’s to do with lifestyle, being your own boss, travelling the country, the romantic notion of trucks,” says Dean. ”People just want to drive trucks, they have grown up watching trucks and want to be part of it.” And, he says, there are hundreds of different trucks jobs.

”You can do 20 hours a week or 70 hours a week; you can do night shift or early mornings; there are smaller trucks around town, the bigger trucks that operate regionally and then you have the bigger truck and trailer units running up and down the country.”

And because there is such a shortage of drivers they can almost pick and choose what they want to do and where. Dean has a different take on the money.

“It’s $18 to $20 an hour for someone with not much experience, then up to $25 to $30.But if you are driving a milk or fuel tanker it could be up to $38 an hour. So work long and hard and potentially it’s a good lifestyle and a very good earner.”

And there’s lots of work to do. Thirty-two per cent of the country’s freight is carted on roads in the Bay of Plenty and Waikato. Now SWEP and the industry is focused on drawing 1000 new drivers into the road freight transport industry to help move that product and fix a problem that just won’t go away.

Port on Labour’s $20m rail plan: ‘I’m surprised no one talked to us about it’

Labour leader Jacinda Ardern’s $20 million promise to link passenger rail services between Tauranga and Auckland has already hit a snag, with Port of Tauranga’s boss questioning its likelihood.

The high-speed rail proposal was released last week by lobby group Greater Auckland and was immediately backed by the Green Party.

Ardern yesterday addressed a crowd of about 400 on Tauranga’s waterfront and pledged Labour’s support for the plan.

She said Tauranga was a special place for her and called up a young girl who was a family friend with a home-made “Let’s do this” T-shirt.

“The ‘Golden Triangle’ of Auckland, Hamilton, and Tauranga contains half our population and economy. In the next 25 years, it is projected to gain another 800,000 people – three-quarters of national population growth. It’s time this growing region had a modern, rapid rail service,” Ardern said.

Ardern pledged the $20m to establish the first stage of the passenger service proposal – estimated to cost $10m.

If demand is there, Labour would look to invest in stages two and three of the plan, delivering services travelling up to 160km/h throughout the wider region.

The additional $10m would be invested over five years for operating costs.

When asked by the Bay of Plenty Times if she had spoken with the Port about whether the plan was possible, she said: “Not specifically, but I don’t imagine it would have any impact on the work that they do.”

Port of Tauranga chief executive Mark Cairns disagreed.

There are 78 freight trains a week on the rail line to the Port and this was expected to rise to more than 90 per week over the next 12 months.

“I’m surprised nobody has talked to us about it,” Cairns said.

Labour’s Transport Spokesman Michael Wood said the eastern main trunk line –
“which will be the bit of track that the Port is referring to” – had capacity for four trains per hour.

Wood said Labour was looking at just two trains a day using the line, “so it’s got capacity of four per hour, there is absolutely capacity within there to deliver that”.

“And no one user … certainly, has a right to exclude others,” Wood said.

“As the policy gets developed further and implemented, we’d certainly sit down and talk with the Port, but when you’re developing a policy like this, you don’t necessarily sit down with what is effectively a private company that currently has exclusive use of that track and has interests of potentially keeping others out.”

Tauranga Mayor Greg Brownless said he did not think the rapid rail proposal would have an impact on the Port.

“We’re only talking about a train or two a day, so I don’t think that would interfere with the Port, no.”

Kiwirail were not able to respond to requests for current line use by freight trains in and out of the port before publication last night.

Transport Minister Simon Bridges, who is also Tauranga’s MP, said Labour’s adoption of the passenger service was unrealistic.

“The Auckland-Hamilton-Tauranga rail line is our busiest freight route and simply doesn’t have the capacity to also be a commuter rail line.”

Tauranga Labour candidate Jan Tinetti said passenger rail was long overdue for Tauranga.

“The growth that we’ve had here has been phenomenal in the last few years and we need to actually look at public transport.”

Labour also plans to:

• Boost transport investment in regional projects across the country by doubling the funding range in the Government Policy Statement.
• This will lift funding available for regional projects from $70m-$140m a year to $140-$280m a year.
• The increased funding will be available for all regions and for all transport modes.
• Ardern also set out a promise for her first 100 Days in Government – holding a roading summit in Wellington for the county’s local bodies and transport bodies.

Vigorous expansion in the China-owned fleet

Expectations of robust growth in the China-owned merchant ship fleet this year have been reinforced by expansion during the first half. Additional container ships, tankers and bulk carriers contributed a large increment. The trend looks set to continue, as many new vessels are on order for delivery over the next few years.

Further reorganisation progress among Chinese state-owned shipping companies seen in recent months is another aspect. Changes under way are designed to improve efficiency and boost competitiveness, enhancing financial performance amid difficult global circumstances in the main market sectors.

An enlarging fleet

In the past two years, stronger fleet growth returned to the China-owned fleet. After a previous deceleration, increases of 7 percent in 2015 and 8 percent in 2016 were seen, measured in gross tons capacity. Based on provisional Clarksons Research calculations, the first half of this year saw an increase of 5 percent (comparing the fleet at the end of last year with the total at end-June 2017). Numerous newbuilding deliveries were recorded.

At mid-2017 the entire China-owned commercial fleet, excluding Hong Kong-owned vessels, reached 147.2 million gross tonnes. This volume comprises the world’s third largest by owner nationality, at 11.5 percent of the global total. Greece is the biggest, and Japan is number two.

During the first half of this year bulk carriers, the largest part of the fleet, increased by 3 percent, reaching 77.5m gt. Tanker capacity was up by 8 percent to 27.4m gt, while in the container ship segment a 9 percent rise to 23.5m gt occurred. Gas carriers, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), experienced an 18 percent increase to 2.6m gt.

Ships’ cargo carrying capacity (or, more correctly, total lifting capacity) is expressed here in gross tonnes, because this is a common measurement. Usually, bulk carriers and tankers are measured by deadweight tonnes, container ships by the teu (twenty-foot equivalent unit) and gas carriers by cubic metres. Another statistical point is that vessel ownership nationality is defined by the country where the parent owning company is located.

Additions and employment

Among notable changes in the China-owned fleet during the 2017 first half, newbuilding deliveries of large ships were prominent. According to reports, six tankers of between 308,000 dwt and 319,000 dwt, in the very large crude carrier (VLCC) size category were delivered. Two LNG carriers of 174,000 cubic metres were completed. A number of new 9,400 teu container ships joined the fleet, while numerous capesize bulk carriers in the 180-210,000 dwt size group also were delivered. Further units may be added when more complete information is available.

Where are these and other ships employed? Many new vessels, as well as a large portion of the existing fleet, participate on routes connecting China with import suppliers or, in some cases, export markets. Some are employed in international ‘cross trades’ where China is not involved. Yet other, often smaller, vessels participate partly or wholly in the Chinese coastal trade, a huge protected market limited mainly to Chinese registered, owned and operated tonnage.

An analysis published several weeks ago by Clarksons Research revealed that the China-owned fleet frequently visits ports in China. Currently as much as 74 percent of port calls by ships in this fleet (based on tankers and bulk carriers only) are at domestic ports. The result contrasts with employment of these vessels by some other top shipowning countries. Japan-owned ships home port visits comprised about 53 percent of the total while, for the number one owning country Greece, a low 9 percent was observed.

Further consolidation

Organisational changes are also prominent. As well as the mega-merger between COSCO and China Shipping Group last year, another large merger of state-owned shipping companies was arranged but not fully implemented. During the first half of 2017 reports suggested that the Chinese government was applying pressure for China Merchants Group, and Sinotrans & CSC Holdings, to completely integrate their businesses, signs of which later emerged.

What can be achieved by such amalgamations? Consolidation is widely recommended as a necessary step towards competing more strongly and achieving greater market share, an especially valuable attribute when over-capacity prevails and markets are weak. Increasing efficiency, reducing costs, benefiting from business ‘synergies’ and leveraging economies of scale are all seen as useful advantages of this process. But historical examples show that the improved financial performance anticipated sometimes proves difficult to attain.

The China-owned fleet is now dominated by the two new groupings, COSCO and China Merchants. Numerous other companies also own ships, some of which are leasing and financing businesses connected with Chinese and foreign operators.

Another consolidation of great significance for the global shipping industry has begun, involving a state-owned Chinese company and a foreign ship operator. In mid-July this year the Hong-Kong owned Orient Overseas Container Line (OOCL), the world’s seventh biggest container service operator, with 66 owned ships totalling about 440,000 teu, agreed a $6.3 billion takeover by China’s COSCO.

Analysis by Drewry Maritime Research characterises OOCL as being ‘a very well-run company’. The combined COSCO-OOCL operation is placed in the number three position among container lines, after leaders Maersk and MSC. Based on June 2017 data, calculations showed an existing COSCO-OOCL fleet totalling 2,185,000 teu capacity, equivalent to an 11 percent share of the world container ship total. Both COSCO and OOCL are members of the Ocean Alliance of container shipping lines which, it is suggested, will be beneficial in facilitating the merger.

A possible obstacle is foreshadowed by a comment that the takeover is likely to prove ‘tricky and sensitive’. The deal is subject to approval by various regulators in Europe and the USA as well as China, who will consider competition aspects.

Orders imply fleet growth

China’s merchant ship fleet capacity will be greatly determined by many new vessels ordered from shipyards for delivery in the remainder of this year and 2018, as well as later. However, capacity expansion will be affected also by scrapping of older ships and by second-hand purchases and sales, influences which are not straightforward or easy to predict.

As calculated at mid-2017 orders at shipbuilding yards placed by China-based owners, for all vessel types and sizes, comprised 405 ships amounting to 24.2m gt, according to Clarksons Research. The total was equivalent to just over 16 percent of China’s existing fleet. Within this total, 6.8m gt or 28 percent was scheduled for delivery in second half 2017 and 55 percent next year. The actual timing of newbuilding deliveries may differ from that scheduled, however.

Among notable vessel types on order, container ships in the 19-21,000 teu ULBC (ultra-large box carrier) size group, and 9,400-14,500 teu range, are prominent. Tanker newbuildings for the China-owned fleet include VLCC 300-319,000 dwt orders. Also, a second phase of the valemax 400,000 dwt ore carriers category is approaching, with a further thirty ships ordered for Chinese shipowners. Additionally, numerous bulk carriers in the capesize category have been ordered.

Shipowning intentions

Perceptions of robust future fleet enlargement are reinforced by an underlying theme. A long-stated Chinese government aim is to ensure that a greater proportion of the country’s vast seaborne trade is transported in ships owned and controlled by companies based in China. The extensive container ship, VLCC tanker and valemax ore carrier newbuilding programmes are consistent with this broad objective.

The leading tanker owning company, China VLCC, in May this year was reputed to control the world’s largest fleet of VLCCs. This operation is a subsidiary of China Merchants (it was originally jointly owned with Sinotrans & CSC, which has merged with China Merchants), controlling 41 ships and having placed orders for 12 newbuildings to be delivered during the remainder of this year and 2018. Reports suggested that additional acquisitions were being considered, intended to further enlarge fleet capacity.

Noteworthy also was a report indicating that Chinese owner Shandong Shipping had been looking at possible secondhand VLCC purchases, adding to its involvement in the bulk carrier and gas sectors. A key motivation for buying large tankers appeared to be to provide extra, more economical transportation for crude oil imports by small private independent refiners. These refiners, known as ‘teapots’, many of which are located in Shandong province, have seen a great expansion of their imports after receiving larger allocations of government quotas.

In the container sector one commentator has suggested, perhaps controversially and apparently based on supposition, that China’s target is to achieve the number one position in the container ship operator world ranking. Both commercial and geopolitical logic, it is argued, point in this direction. That contention is based on an impression that China is anxious to protect supply chains, while strengthening its defence and security presence. It is suggested that a much larger container shipping involvement can assist in attaining these objectives.

An elevated role

Other aspects relevant to the upwards fleet trend are visible. How does China’s Belt and Road Initiative (also known as ‘One Belt, One Road’ or OBOR) relate positively to the China-owned merchant ship fleet? The BRI’s main physical feature is a planned huge scheme of infrastructure projects intended to improve trade connectivity across a wide geographical area. The ‘Road’ part of the title represents the ‘21st Century Maritime Silk Road’ concept, a sea route pattern stretching from the South China Sea and South East Asia, through the Indian Ocean and Middle East area, into the Eastern Mediterranean.

Port developments progressing in a number of foreign locations link the Road’s sea routes with elements of the land routes in the ‘Silk Road Economic Belt’, the second portion of the grand scheme. China’s merchant fleet expansion can be related in part to this scheme, although actual shipping services on the sea routes or associated with these have not been accorded as much attention as the improvement of port facilities.

Illustrating how shipping services are evolving, recent news highlighted COSCO Shipping Specialized Carriers Company, which operates 120 ships including multipurpose and heavy lift tonnage. These vessels are often employed beyond BRI countries, to many destinations in Africa and South America. Cargoes of construction materials needed for building power plants, factories, roads and railways are carried, as well as a wide range of heavy plant and machinery and manufactured goods.

Attention has been drawn also to a category of the China-owned fleet where ship employment is fully controlled by foreign companies. This feature occurs where vessels are bought by Chinese companies for leasing to foreign operators. Prominent providers of this type of lease finance are International Commercial Bank of China (ICBC), Minsheng Bank, and Bank of Communications (BoCom). Many container ships have been financed. A total $11.5 billion was reportedly invested in shipping by Chinese leasing groups during 2016.

One news item suggested that, if future market weakness resulted in foreign companies defaulting on payments due to Chinese financiers under leasing arrangements, potentially China could gain a more powerful influence over the global shipping industry. In response, a leading shipbroker contended that such an opinion appeared to be an exaggeration.

Adopting a broad viewpoint, strong evidence points to the China-owned merchant ships fleet experiencing further substantial growth in the years ahead. Partly this may reflect more financing of vessels, leased to foreign shipping companies, which have full long-term operational control. Mostly, however, shipping companies based in China seem likely to be the operators of additional tonnage joining the nationally-owned fleet. Although some uncertainty surrounds the exact pace, a solid upwards fleet trend can be predicted.

Article by Richard Scott, associate, China Centre (Maritime), Solent University and managing director, Bulk Shipping Analysis

Article arranged on behalf of Hellenic Shipping News Worldwide