What has the Baltic done for global ferry industry? - Baltic Press

MaritimeThoughts on surfing through the Baltic ro-ro & ferry map portalWhat has the Baltic done for global ferry industry?The Baltic Sea encompasses a rich mixture of tradition-laden shipping that has hitherto led the world in termsof ferry and ro-ro design, quality standards and to a large extent, profitability. It was not always so however.The Baltic region has taught theferry industry much over theyears even though I have alwaysviewed sceptically – and not fornationalistic prejudice – any claim that itwas where ro-ro was actually conceived. Itis true of course that mankind has movedgoods by sea for centuries and that at timesthis would have included use of wheels, buta more truism would surely be an examplewith more gravitas. I contend that the Vikingex Dinard was the first such vessel tomake its mark in the ferry sector.In the beginningThe Southern Railways steam turbinecross-channel ferry Dinard, was built in1924 by Denny on the River Clyde. Shewas 99 metres long, 19 knots, GT 2,294,sported 354 berths and carried 1,300 passengers.Dinard operated the night servicebetween Southampton and Saint Maloand distinguished herself in the SecondWorld War at Dunkirk and Normandy.The demand for the transportation of carsto France was increasing, so Dinard wasrebuilt as a car-ferry, re-entering servicein June 1947 between Dover/Folkestoneand Boulogne with a reduced capacity of363 passengers and 70 cars. At this stagethe cars were still crane-loaded, but in1953 Dinard received modifications toher stern, allowing cars to board and leaveover a ramp, inaugurating the drive-on,drive-off service between Dover and Boulogne,the route Dinard remained on untilwithdrawn in 1958.Instead of scrapping, Dinard was soldto become the first ship of the now matureViking Line, whose operations began on thefirst of June 1959 for Åland owners GunnarIn perspective, the diminutive Vikingex Dinard alongside the Cinderella16 | Baltic Transport Journal | 4/2012Credits: Ossie Jones/Bill MosesEklund and Henning Rundberg. They renamedher Viking after further modificationsto her car capacity and appearance. Whateverthe alternative view on the origins of roro,few vessels if any had such an interesting,impressive and international career as theViking, spanning a total of 49 years.Viking Line was soon head-to-head withthe Silja brand but it would be too simplisticto describe what transpired as history. It istrue that these two leviathans grew into verysignificant businesses with ships that any ferryoperator would be proud to be associatedwith. It is also the case that these two organisationsdefined standards so high that it wasto be several decades before they were challengedand that they also coined the phrase‘cruise ferry’, a classification since shared,without provenance, by Greek ferry operatorsand others. Silja was taken over by SeaContainers in 2002 after progressive sharepurchase although at the end of 2005 the parentcompany, which had undoubtedly struggledwith the Finnish subsidiary, decided toexit the ferry sector and Silja was offered forsale, later announcing the sale in June 2006to the Estonian AS Tallink Grupp. Tallinknow operates an impressive fleet of 11 vesselslinking Sweden, Finland and Estonia withgrowing patronage that in 2011 exceeded 9million passengers. Tallink’s direct competitioncomprises Viking Line and Eckerö Line,the latter business having recently acquiredthe 2001-Daewoo built Moby Freedom for itsHelsinki-Tallinn route. The 27-knot vessel,which is a near sister to Tallink’s Superstar,is due to enter service later this year replacingthe much slower, 31-year old Nordlandia exOlau Hollandia. Rederi AB Eckerö’s chairmanis Jukka Suominen, past Group ChiefExecutive of Silja Oyj Abp, so it comes aslittle surprise that the vessel will be renamedFinlandia, a name used for Silja Line’s firstcruise ferry in 1981.The Baltic contributionSo what has the Baltic done for shippingin general and the ferry sector in particular?Well, at a time when the industryat large is scrambling to find workable solutionsto emission control regulations weshould spare a thought for m.s. Selandia, theworld’s first large diesel-powered ship, builtby B&W (now MAN) for the Danish EastAsiatic Company in 1912. The diesel engine,invented by Rudolf Diesel was said at thetime to be two or three times more efficientand cleaner than steam power. Ironically,100 years later we are searching again for acleaner solution and in the spirit of traditionit seems highly likely that the optimum curewill be found once again in the Baltic region.Spare a thought also for Silja Symphony andSilja Serenade, two iconic cruise ferries thatgave us the atrium, a concept since borrowedin large measure by the cruise industry andused more or less ever since in the designof some of the world’s most impressive vessels.The Baltic was also the scene of one ofthe worst peace time ferry disasters on 28September 1994 when the Estonia ex VikingSally ex Silja Star sank with the tragic loss of852 lives. A certain amount of mystery stillsurrounds the cause of the vessel’s loss, butnonetheless, along with other ferry tragediesthe legislators have been busy creating hardwaresolutions to what are more likely to beinstances of human error.The Baltic’s rich shipping diversitystretches from the leisure-related captiveaudience of overnight cruise ferries, whereon board revenue is a very significant factor,to the more intense infrastructure providedby the likes of Scandlines with a routenetwork to die for. Having recently divestedthe company of its long distance freightroutes which had always been out of characterwith the core triangle of more interesting,voluminous routes, the main focus ison Puttgarden-Rødby, Gedser-Rostock andHelsingør-Helsingborg.The so-called Vogelfluglinie, which translatesto something close to a ‘bird’s flightline’ reflecting a crucial 45-minute sea passagein the direct path linking Copenhagenand Hamburg, is nothing short of impressivewith a timetable to set watches by, cleverautomated mooring and three shore rampscontrolled from the double-ended shipsbridge. Despite earlier concerns, the FehmarnBelt Bridge, which as from December2010 was destined to become a tunnel, isnot now forecast to be completed until 2021leaving some headroom for earnings meantime.The company’s secondary strategy, achange of focus to the Gedser-Rostock route

Maritimehas been disappointingly tainted by shipyarddelays affecting two newbuilds, the Copenhagenand Berlin, both of which are subjectto late delivery by the builders, P+S Werftenof Stralsund, Germany. One of the problemsassociated with key, volume routes is theirsusceptibility to talk of fixed links and Gedser-Rostockhas been no exception althoughScandlines EUR 230 million investment invessels and infrastructure should fend-offany thought of a bridge or tunnel.Scandlines impressive ‘magnet’, the Border Shop inPuttgardenPhoto: Bill MosesWhere only ‘ferries’ dareThe Baltic markets served by ferry operators(large and small) are not vast, a factorthat nevertheless staves off the advanceof dense population hungry low-cost airlineswhich have taken their toll of surface operatorselsewhere in Europe. Equally importantis the ‘city centre to city centre’ geography andfor overnight services the opportunity to turnA2B travel into an enjoyable leisure experiencewith a range of facilities that often surpassthose on offer ashore. Where the increasingimportance of freight has underpinneddownward pressure on passenger ticket priceselsewhere in Europe, so on board sales, bothretail and food and beverage, supported byÅland Island duty free calls, more than makeup for lower freight demand in the north Baltic’sovernight cruise ferry sector.Tab. 1. Main market population, Denmark, Estonia,Finland & SwedenMain marketsPopulation (mln)Denmark 5.6Estonia 1.3Finland 5.4Sweden 9.5Source: VariousThe Baltic region passenger ferry market,supported by a wide and varied route networkis approaching 50 million passengers, a remarkablefigure given the population size. Freightthroughput in 2011 slightly exceeded 3.5 millionunits, a figure in comparative terms broadlyequivalent to the volume handled on the NorthSea, Dover Strait and Western Channel.Fig. 1.Top 6 ferry operators’ passenger volumes (mln)Source: Baltic Ro-ro & Ferry Yearbook 2012Fig. 2. Top 6 ferry operator freight volumes (thou. units)Source: Baltic Ro-ro & Ferry Yearbook 2012Stena Line, consisting of 32 ships on 17routes and representing 37% of parent companyStena AB, posted annual revenue of SEK9,684 million and a loss of SEK 366 millionin 2011. Stena operates a total of eight Balticroutes served by 16 vessels ranging from theimpressive Scandlines-branded Skåne throughto the somewhat out-of-character MercandiaHH Ferries sisters on the 20-minute Helsingør-Helsingborgcrossing.Some operators have specialist tonnage toserve passenger and freight sectors althoughDanish operator DFDS has developed a networkthat takes it one stage further sufficientto claim its status as northern Europe’s largestintegrated shipping and logistics company.The company has a fleet of 41 ro-ro, ro-paxand passenger ferries of which 9 vessels comprisingtwo ro-ro and seven ro-pax are devotedto Baltic business units contributing18% of the 2011 shipping division revenue.In overall terms the shipping division madea return on capital (ROIC) of 10.2% downfrom 12% in 2010 and yet compared with theNorth Sea, Irish Sea and Channel, the Balticperformance was by far the best at 18.7%.Another long standing, more freight orientatedferry operator, Finnlines, which is part ofthe Grimaldi Group, operates a fleet of around25 vessels with a network of over 20 ports of callin regular Baltic and North Sea liner services.The Finnlines Group recorded revenue totallingEUR 605.2 (561.1) million, an increase of 7.9%compared to 2010. Of this figure, shipping/seatransport services generated revenue of EUR563.3 (513.7) million and port operations EUR67.7 (72.3) million. The company’s result beforetaxes (EBT) was EUR -5.4 (3.7) million, reasonsfor which are cited as a port strike and ice conditionsearlier in 2011 and increased energy costs.One of Finnlines claims to fame was its prestigiousbut largely uneconomical addition to thefleet of Finnjet (or Jetti as some would call her).Built in 1977 she was the largest, longest andfastest car ferry of her day, with Pratt & Whitneygas turbines developing 55,000 kW drivingher at over 30-knots and cutting the Helsinki-Travemünde route from 36 to 22 hours.Burning around 300-tonnes of fuel for asingle trip was neither good economics or environmentallysustainable, talking of which therace for scrubbers, dry or wet is on in the industry’sattempt to find the most workable andcost-effective solution. With nearly as manypreferences for a way forward as there are ferryoperators, ranging from LPG through to use ofeven heavier and cheaper heavy oil with addedpurification or something closer to ‘do nothing’by converting to MGO at the last minute ifnothing else seems suitable, the jury is still out.With wet scrubber installation costing aboutUSD 1.8 million per 15,000 kW the pressureon an already challenged industry is considerableand may push some too far. Others willdoubtless attempt to pass on increased operatingcosts to passenger and freight clients whichmight in turn convert some, where practicallypossible to overland. What price environmentalsolutions then?Alas Jetti is no more, the route years lateris plied by Italian built ro-pax vessels of theso-called Star Class, each with capacity for 550passengers and an impressive 4,200 lane metresof vehicle deck space. At 25-knots the journeynow takes 28 hours. In summary, Balticservices are a traditional way of life fashionedoriginally by impressive shipping leviathanssuch as Johnson Line, Effoa, Bore, Svea andothers, for convenience, reliability and qualityservice, hallmarks of an efficient and valuedinfrastructure that users respect and rewardwith reciprocal loyalty and repeat bookings.Baltic ferry services are inspirational, innovativeand for the most part, indispensible. Bill MosesBill Moses has had considerable experienceat senior management and board level runninglarge passenger and freight shippingbusinesses including high profile servicesoperated by Hoverspeed, Sealink, Stena Line,Sally Line and Olau Line. He is now responsiblefor Drewry Shipping Consultants’ Ferry& RoRo division providing advisory servicesglobally to governments, commercial undertakingsand financial institutions. Bill wasawarded a M.B.E. medal by Her Majesty theQueen in 2008 for services to shipping businessand charitable work and gained a PhDfrom the University of Greenwich in 2011 forhis thesis entitled The Commercial & TechnicalEvolution of the Ferry Industry 1948-1987.4/2012 | Baltic Transport Journal | 17