TREGURTHA DEFENDS BOOKING SYSTEMS

Pinnacle Corporation and MetroBox Specialised managing director Grant Tregurtha has spoken in defence of the booking systems introduced by Auckland container storage depots, stating recent congestion issues would have been even worse without their contribution.

His comments follow National Road Carriers (NRC) port committee chairperson Chris Carr’s recent criticism that the systems have imposed both costs and “logistical juggling” on transport operators while not delivering such promised benefits as reduced turnaround times.

“Turnaround times have reduced in Auckland, albeit not to the levels that we had anticipated,” counters Mr Tregurtha.

“A 24% increase in empty volumes last year through the Auckland container parks created congestion within all operational aspects of the depots, especially with gate co-ordination.

“Without the gate booking system the gate waiting times would have manifested into significant permanent delays that would have been measured in hours rather than minutes, so we see the booking system as a valuable tool in assisting the successful processing of volume at the gate.”

Mr Tregurtha says the booking systems provide key “visibility”.

“Pre system we were totally reactive to the request which was first notified to us when the truck arrived at the gate.”

He adds that the problematic issues at play need to be tackled on a collaborative basis.

“I firmly believe the difficulties the industry is facing will only be solved if we all recognise that it is an industry issue and work collectively and not as a direct result of failings with individual components of the process.”

SHIPPERS NEED NEW ALLIANCES TO WORK — ARSENAULT

A failure of pending alliances to return the global container shipping industry to profitability could deliver a devastating future reality to the interests of shippers, according to former Hyundai Merchant Marine vice-president David Arsenault.

In a recent address to the International Propeller Club, Mr Arsenault reportedly stated that if those new alliances cannot sufficiently raise rates, then shippers “won’t like the next step”.

That next step would entail rapid consolidation through mergers and acquisitions that would leave the industry with a handful of extremely powerful shipping lines that could set freight rates at will, reports JOC.com.

Mr Arsenault said such a scenario had occurred in the global airline industry, where after many bankruptcies and mergers, the remaining carriers were now in a position to influence capacity so as to keep planes full and fares on a continual rise.

Meanwhile, JOC.com is also forecasting that United States ports will face “unprecedented” operational challenges when containerlines restructure from four down to the three new global vessel-sharing arrangements on April 1.

It predicts that the introduction of The Ocean Alliance, THE Alliance and the 2M Alliance will particularly result in “magnified” challenges for the ports of Long Beach and Los Angeles. Previous congestion issues at such ports has caused significant flow on “out of window” call impacts for New Zealand and other ports around the world.

OOCL TAKEOVER BID?

Marketplace rumours are circulating that one of the world’s largest containerlines could be eyeing a potential takeover bid for Hong Kong-based Orient Overseas Container Line (OOCL).

Currently ranked eighth in the world in regards to capacity at 571,183 TEU according to Alphaliner, the carrier’s shares have been observed to undergo a significant recent surge on the Hong Kong stock market amidst the speculation.

It has been noted that the gap is “widening” between the largest carriers — AP Moller-Maersk at 3.28 million TEU, Mediterranean Shipping Company at 2.84 million TEU, CMA CGM at 2.13 million TEU and COSCo at 1.64 million TEU — and the rest of the marketplace.

Furthermore, Transport Intelligence observes carriers such as OOCL — which is actually slightly smaller than the about-to-be acquired Hamburg Süd — are becoming increasingly “vulnerable” as the larger carriers continue to grow through acquisition.

“Such consolidation cannot be anything other than a challenge for the likes of OOCL,” it states.

“Although it has a better record of profitability than many others, for the first half of 2016 the company experienced a loss, mitigated by the revaluation of assets.

“Creating a new company that will be successful in today’s market is not easy. Yet should the Tung family, that holds a controlling stake in OOCL, wish to initiate some sort of process either of merger, purchase or sale, there probably would be no shortage of targets in the vicinity of the South China Sea.”

PREDICTIONS FOLLOWING ONE OF “WILDEST” YEARS

Pricing becoming “shakier”, further consolidation and alliance adjustments are among predictions for the global container shipping industry made by the JOC.com media outlet, following what it describes as “one of the wildest years in container shipping history”.
“Within one year, the industry witnessed the largest bankruptcy in liner history with Hanjin Shipping, historically low spot rates, the narrowing of the top 20 global container lines to 14 and the dramatic reorganisation of global shipping lines into new, larger vessel-sharing agreements,” it states.
“With the industry in such a dynamic state, 2017 will likely hold its own surprises.”
The Newark (United States)-based media outlet is also predicting a squaring off between labour and employers in American ports and big ships testing that country’s port infrastructure, as well as terminals and ports banding together on the global scene.
On the latter point, JOC.com comments that having observed the operational and cost efficiencies containerlines are generating by teaming up with rivals, ports and terminals around the world have begun to follow suit.
“The ports of Seattle and Tacoma joined forces in 2015 to improve productivity and eliminate excess capacity, and the end of 2016 saw a flurry of activity among ports and container terminals seeking to form co-operation agreements.
“Federal Maritime Commission (FMC) chairman Mario Cordero has said there will be more agreements like these in the future …
“On the other side of the globe, a number of terminals in Hong Kong are uniting in a bid to stop the steady decline of trans-shipment volumes at the port.”

CONTAINER OPERATIONS RETURN PLANNED FOR CENTREPORT

Modified container operations are expected to recommence at CentrePort Wellington by July this year or sooner.
CentrePort chief executive Derek Nind this week announced work is planned to secure its two 86-metre-high and 720-tonne gantry cranes, which were rendered inoperable among the significant damage suffered by the port in the November 14 earthquake.
While CentrePort is to continue working with shipping lines over using geared ships as an interim solution, the port is progressing a plan to both reintroduce crane operations and build resilience in case of another significant event, says Mr Nind.
“For the medium term we are developing a plan for interim works that could restore modified container operations within four to six months,” he says
“This would immediately improve CentrePort’s capacity and productivity, allowing us to serve the needs of importers and exporters in the central region. We will be keeping our customers informed as these plans develop.
“We know how important container shipping is to the regional economy. That’s why we worked hard to quickly restore limited container movements using ships with their own cranes. We are now assessing longer-term options to keep freight costs low for Wellington’s businesses.
“Over the coming days CentrePort will also commence maintenance on the berth pockets alongside part of Aotea Quay Wharf. This will increase the flexibility of operations at the port, since the earthquake has damaged Aotea Quay 1 and Thorndon Container Wharf.”

 

SEEPORT APPROACHES

Ports of Auckland (PoAL) is again inviting members of the public to venture behind the “red fence” during Auckland Anniversary Weekend and partake in its annual SeePort Festival.
Scheduled on the Sunday and Monday of January 29 and 30, SeePort is being billed as an opportunity to “discover your port from land, sky or the glistening sea”.
“Captain Cook Wharf is transformed into a bustling summer carnival with family-friendly rides, tours and day-long entertainment on and off the water, including the SeePort Sunset Symphony & Fireworks with the Auckland Symphony Orchestra and special guests,” states PoAL.
“Following on from the success of the 2016 festival, which saw over 60,000 people visit Captain Cook Wharf, 2017 is set to be bigger and better than ever with in-air helicopter displays, the chance for a lucky few to experience the port from the heights of a crane and the Royal New Zealand Navy’s inshore patrol vessel, HMNZS Taupo, open days.”
SeePort is a free-entry event, including rides, tours and activities with the exception of the helicopter rides, heritage sailings on the William C Daldy steam tug and the PoAL crane experience.

PoAL senior communications advisor Alexandra Ropati <ropatia@poal.co.nz, +64272885596> should be contacted in regards to arranging access to the later two attractions.
The festival is to commence with an official opening at 10am on the Sunday morning, following the gates opening at 9am.

KAIKOURA ROAD AND RAIL REBUILD ADVANCES

Good progress is being reported in the rebuild of both the existing State Highway 1 and rail corridor along the coastal route north and south of Kaikoura.
The works, which are being undertaken by the New Zealand Transport Agency (NZTA) and KiwiRail, received a significant boost with the mid-December Cabinet announcement the Crown would provide the estimated $1.4 billion to $2 billion funding required.
An Order in Council subsequently signed by Governor-General Dame Patsy Reddy modified provisions of the Resource Management Act and nine other pieces of legislation, in order to streamline the works.
Including additional improvements to increase safety and resilience, the project is expected to have at least delivered limited coastal route access by the end of 2017.
On Wednesday this week, KiwiRail network services group general manager Todd Moyle announced a significant section of the Main North Line had been reinstated, with the track from Picton to Grassmere repaired and designs for six bridges on the route near completion.
In the most recent development on the roading works, NZTA earthquake recovery manager Steve Mutton also announced on Wednesday that State Highway 1 was to be closed from Hundalee to Kaikoura on January 16-17 to enable sluicing of slips above the road.

HMM OPTS FOR 2M SLOTS ONLY

Hyundai Merchant Marine (HMM) is entering into a “strategic co-operation” with Maersk Line and Mediterranean Shipping Company (MSC), that is said to involve a combination of slot exchanges and slot purchases between the three parties.

In a statement posted on the South Korean carrier’s Website on December 11, the agreement was noted to be “outside the scope of 2M vessel-sharing agreement” between Maersk and MSC.

“However, [it] will benefit the 2M network and provide new opportunities, not least in the trans-Pacific trade,” states HMM.

“The agreement is scheduled to begin in April 2017 subject to regulatory approval. The initial term of the co-operation is three years and covers key east-west trades.”

Maersk and MSC are also expected to assume various charters and operation of vessels currently chartered to HMM.

Having signed a memorandum of understanding with 2M earlier in the year, HMM had until even recently disputed speculation that it was not intending to become a fully-fledged member of the alliance.

It is understood that joining an alliance with major carriers was a condition of a debt restructuring deal struck between HMM and creditors earlier in the year. Main creditor, the state-backed Korea Development Bank, has reportedly said it has not yet decided its position on the agreement but was looking at it “in a positive light”.

SHIPPERS CITE OVERCAPACITY IN NEGOTIATIONS

United States shippers are reportedly resisting carrier moves to restore rates on the trans-Pacific (Asia-North America) tradelane, given a largely unchanged overcapacity situation in global container shipping.

With the most influential shippers in the tradelane currently paying eastbound 40-foot container rates of US$750 to the West Coast and US$1400 to the East Coast, carriers are understood to be seeking respective increases to US$1500 and US$2800.

However, overseas commentators have observed that unless the pace of vessel scrapping significantly ramps up, “the fundamental truth is that the vessels are still there”, thereby maintaining the shippers’ upper hand.

It has also been noted that carriers continue to be their own worst enemies, as evidenced in the aftermath of Hanjin Shipping’s demise, whereby increased capacity was promptly deployed in the busiest eastbound Pacific routes. Despite Hanjin providing about 7% of capacity in the tradelane, its demise consequently caused “hardly a blip” in freight rates.

However, it is not all plain sailing for shippers, with expected further carrier failures and overall consolidation lessening options. This has had the impact of prompting shippers to ensure alignment with carriers that suit their networks and are stable/have secure partners, as well as deliberately forging new carrier relationships in order to mitigate risk.

TAIC REPORTS ON ARATERE PROPELLER LOSS

A sub-optimal fit, vibration, corrosion and the uneven thrust produced by differently-pitched blades all contributed to the “fretting” which saw the Interislander ferry Aratere ultimately lose its starboard propeller shaft in Cook Strait in November 2013.

Such were the key findings of an investigation by the Transport Accident Investigation Commission (TAIC), which recommended parent company KiwiRail improve its process documentation for both the fitting of new propellers as well as on the final fit achieved.

The TAIC also urged Standards New Zealand to forward the report to the International Organization for Standardization, so as to establish if current standards for manufacturing large-diameter marine propellers are appropriate for modern, high-efficiency propellers operating closer to cavitation margins.

In response, KiwiRail group general manager Todd Moyle acknowledged the “valuable” recommendations made about the standard for advanced propeller manufacture and confirmed the Interislander had already improved document management processes.

However, having undertaken its own “extensive investigation”, KiwiRail did not accept an additional TAIC viewpoint that it had not followed manufacturer advice on the best means of fitting the propellers and therefore had potential contributed to the failure, he says.

“The proposed method of fitting the propellers was impractical because of the very long shaft fitted,” says Mr Moyle.

“The method we did use to fit the propellers was discussed with the manufacturer, who accepted it as an alternative.”

Mr Moyle adds that control of the Aratere was never lost during the incident — “and at no point were passengers or the vessel at any risk”.