Shipping lines should exploit the current crisis in world trade to combine volumes and offer carmakers new trade routes, according to VW. But shipping lines are more likely to consolidate routes rather than volumes, while reducing unit costs with larger ships. Could moving containers together with ro-ro be an answer?
Speaking at this year’s biannual RoRo 2010 conference in Bremen, Germany, Andrea Eck, general manager of outbound logistics for VW, said the carmaker is seeking weekly services, even for routes with low volumes, and she asked ro-ro providers to offer “new and sophisticated concepts”.
“The customer side is open but we can’t start,” she told delegates. “We need input from your side because the shipping lines and logistics providers have the overview and can consolidate the volumes.”
However, Nick Pank, business development director at P&O Holdings, pointed out that new routes are a product of the spare capacity plaguing the shipping industry and Eck’s proposals would be loss-making venture if the risk wasn’t shared.
“We are asked to set up a new service, take all the financial pain and in return we get a handshake. So where does that leave us today?” he asked. “We would rather expand our megahub and lower our cost per unit with bigger ships rather than going to new ventures with partners.” Until those partners share the risk Pank warned that carmakers could expect fewer routes on offer: “This is the sign for the next few years: the large will get larger. That means fewer routes for the customers.”
On the wider question of whether ro-ro providers were better placed to move goods than container providers in terms of linking with other modes, Oliver Fuhljahn, Rhenus Port Logistics’ director for business development, said the issue involved reliable handling and onward carriage.
But on combining ro-ro and containers (or con-ro), Eck said VW’s demands had to be met and decisions made on where the priorities for shipping different cargos lay. “What happens if there is an overbooking on the vessel?” Eck asked. “Which parts will be preferred for transport? We are concerned with how this will be managed on a daily basis.”
She also said that a split on a certain trade between the modes of transport on a container vessel and con-ro would not be manageable for VW. “It means additional handling costs and administration costs, and this we will not accept.”
