March Front Cover - WorldCargo News Online

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WorldCargonewsAny company or entrepreneurwho can come upwith an environmentallyfriendlyproduct that can matchapitong plywood in terms of technicalperformance and be producedin large volumes at a comparableprice could make a killing in thecontainer flooring market.Simple? Unfortunately not.The only “killing” going on atpresent is the continued destructionof the world’s tropical rainforeststo feed the voracious appetiteof industries that have cometo rely on apitong plywood. Notleast among these is the containermanufacturing sector, which last36CONTAINER INDUSTRYFloors - going nowhere slowly?The search for environmentally-friendly alternativesto apitong plywood for container floors is ongoing,but progress to date has been negligibleyear consumed more than 500,000m 3 of apitong and will require atleast as much again this year.And the chances are the industrywill have no problem in securingthe necessary supplies.Despite severe logging and exportrestrictions imposed by the governmentsof Indonesia and Malaysia,the main suppliers of tropicalhardwood container flooring,widescale illegal logging of often“immature” trees continues to ensurea ready supply.Quality may be variable - anissue that is being addressed by theIICL’s recently issued PreferredStandards for Hardwood PlywoodFloor Panels - and the price mayfluctuate - it is currently aroundUS$530/m 3 (US$200 per 20ft set)up from US$480/m 3 (US$180 per20ft set) at the beginning of theyear - but apitong plywood continuesto be almost universallyspecified for dry freight containersand remains the technical andcommercial benchmark againstwhich alternatives are measured.Little headwaySmall wonder, then, that pro- motorsof environmentally-friendlyflooring alternatives have made littlereal headway to date. Though anumber of products have been developedthat match apitong plywoodfrom the technical standpoint,few have come close tomatching it in price or availability.And though most containerowners agree with the need tomove away from tropical hardwoodon environmental grounds,there are not many prepared to payextra for “being seen to be green”while apitong plywood is still inplentiful supply.The latest project to bite thedust is a non-wood “floorboardsubstitute” developed by Koreancoatings manufacturer KumgangKorea Chemical Co (KCC).Manufactured from a combinationof cellulose fibres and resins,the KCC board fully meets theISO plus 33 per cent (7260 kg)floor strength test and is comparableto apitong plywood in termsof weight, strength and moduli ofrupture and elasticity. Its technicalperformance has been validatedby in-service trials carriedout by Maersk Sealand and P&ONedlloyd over several years.Despite setting up a pilot productionplant in Korea and workingon the product for over sevenyears, however, KCC has decidedto shelve the project. A spokesmansaid simply, “Unfortunately wecouldn’t manage to commercialiseit due to its high material costcompared to its market price.”Hanjin will have the Chemfree board installed in 6,000 20ft boxes this yearThe KCC board joins alengthening list of non-woodflooring alternatives that havefailed to make it to market. Anumber of high and low densitypolyethylene plank floors, andboards made from a variety of recycledplastic waste materials, havemade it into trial operation andproved themselves technically,only to be sacrificed on the altarof commercial expediency.Still they comeNot everyone has given up thehunt, however. A “plastic” floordeveloped in Korea by ChemfreeTech Co and marketed by ContainerNetwork Corporation(CNC), has been supplied in smallvolumes to a variety of shippinglines and leasing companies, includingHanjin, Textainer, KMTC,Maersk Sealand, Dongnama andWeidong, since 1996.Similar to the KCC board, theChemfree board is manufacturedin an extrusion process from cellulosefibres and modifiedpolyolefin resin and is claimed toexhibit technical characteristicssimilar to or better than apitongplywood. Hanjin had the Chemfreefloor installed in 3,800 20ftdry freight boxes and 200 opentops last year and will take a further6,000 sets for 20ft units to bebuilt in China by Jindo from thismonth. MOL is also to undertaketrials with 50 20ft units this year.According to CNC, a largenumber of potential customershave enquired about the Chemfreefloor and expressed the wishto carry out trials in order to compareit with apitong plywood.Supply, however, is currently limitedto around 900 TEU sets permonth and at US$1000/m 3 (CIFChina), more than a few are likelyto baulk at the price.Another Korean company,Dongyang Hichem Co, which isbest known for its range of ventilators,sealants and compositestringers for reefer containers, hasalso developed a new plastic floorand carried out a trial last monthfor K-Line at the Shanghai CIMCFar East factory in China.According to Kazufumi Katajimaof K-Line’s containershipsbusiness group asset managementteam, the test was unsuccessful asthe Dongyang board cracked duringa pass of the ISO test machine.Undeterred, however, Dongyanghas taken steps to strengthen theboard and a second trial is scheduledfor the end of this month. “Ifsuccessful, we will carry out fieldtrials with the new floorboard innew containers,” Katajima said.The cost of the Dongyangboard has not been revealed, but,like Hanjin, K-Line would appearto be willing to swallow any premiumover apitong plywood, particularlyif the promised downstreambenefits of reduced M&Rcosts and the “recyclability” ofsuch boards at the end of the container’slife prove to be valid. “Thedevelopment of new floorboardsis an important matter for us. Weshall adopt them positively in placeof apitong boards in the near future,”Katajima said.Bamboo promiseOf all the alternative wood andnon-wood container floors developedover the past few years, theGreentech bamboo/pine compositeplywood floor, developed byHong Kong-based Techni-ConInternational Development andmanufactured in China by JianouGreentech Boards Industry Co, iswidely acknowledged as havingshown the most promise in termsof environmental acceptability,technical performance and price.Manufactured from a core of 19plies of Chinese red pine sandwichedbetween outer plies ofbamboo - both rapidly renewableresources - the Greentech floor hasbeen installed in many thousandsof containers since its introductionin 1996, major users includingMaersk Sealand and P&ONedlloyd. Though slightly moreexpensive than apitong plywood, itwas only a limited production capacityof around 2000 TEU/monththat prevented Greentech frombeing more widely adopted.As previously reported inWorldCargo News, however, plansfor a major increase in productioncapacity were stymied in mid-2001 when a quality defect in thepine core led to a large batch ofGreentech floors being rejected bythe customer. Investor support waswithdrawn and Jianou Greentechwas forced into bankruptcy. Effortsby Techni-Con to find new investorsfor the project have so farbeen unsuccessful.Alternative sources?It now transpires, however, that -officially or unofficially - theGreentech floor is available from atleast two other locations in China.Guolin Bamboo and Rattan ScientechCo in Anhui Province claimsto have signed an agreement withTechni-Con for “exclusive authorityfor the manufacturing and salesof bamboo/wood composite containerfloors,” though Techni-Conitself denies that any licence arrangementwith Guolin exists.Notwithstanding, Guolin hasregistered Greentech as a trademark in China and is actively promotingit. Samples are known tohave been sent to various potentialbuyers. Production equipment importedfrom Germany is claimedto be capable of producing 20,000m 3 (around 55,000 TEU) ofGreentech floors per year.Meanwhile, Zhonglin IndustryDevelopment Co in Shenzhen,in which Guolin has an interest,also claims to have authority tomanufacture Greentech floors.The company puts its annual capacityat 22,000 m 3 (around60,000 TEU) per year.Guolin and Zhonglin’s combinedcapacity of 42,000 m 3 /yearis, of course, a drop in the oceancompared to the 500,000 m 3 plusof apitong plywood currently usedby the container industry annually.It is, however, at least a small step inthe right direction. ❏March 2003
CONTAINER INDUSTRYDecal makers feel the pressureSuppliers of decals, in commonwith most producers ofcomponents for the containermanufacturing industry,have found the going tough inrecent years. The average price ofa finished vinyl decal set has longremained static and forced all participants,from companies producingthe precursor film to those carryingout decal conversion work,to pare down overheads.Prices have been largely heldin check by intense competitionand a general scaling-up andstreamlining of production processes.Today, even the most expensivefinished container decal, madefrom engineering grade cast vinylfilm, can be obtained for a littleover US$5 per m 2 . Average rawmaterial costs are around US$3-4per m 2 or below. These prices arebarely unchanged on their levelin the mid-1990s.The cheapest decal set, madefrom non-cast vinyl and featuringminimal logo content (but includingall mandatory ISO numbersand lettering), can today be purchasedfor a price as low asUS$10-15. Even the largest banner-stylecorporate liveries, specifiedby some shipping lines, nowrarely cost much over US$100.The shift towards the use of decalsof ever-smaller size has longbeen an industry trend, althoughsome container operators havereverted in more recent years tolarger displays in the wake of ultra-competitiveprices.Market ledThe overall annual demand fordecal film is, of course, determinedmainly by global container output,which has fluctuated sharplyin recent times. Back in 2000, almost1.3 mill decal applicationswere required for new dry freightboxes, which compared with below1 mill in 1999. At least 90 percent involved the fitting of vinylsets, with the balance accomplishedby using the more recentlyadopted paint mask alternative.The total annual figure fell tonearer 850,000 sets for 2001,when the market was weaker, butthen recovered to around 1.1 millin 2002 and could be at a similarlevel this year. It is further estimatedthat around 150,000 decalsets are required annually for reefers,tanks, domestic boxes andother specials, which can sometimescommand a small premium.Naturally, the near-static vinyldecal price has been dictated bythe recent steady fall in newbuildbox prices, which remain at a historiclow. Many container buyershave, at the same time, increasinglyopted to leave the procurement ofdecals, as well as other items, tothe box builder. This has furtherimpacted pricing, as well as theproduct/application selected, ascontainer factories invariably usethe cheapest supplier rather thanopt for a particular specificationas is the case when the containerpurchaser makes a definite choice.Cast offsThis trend has accelerated the useof cheaper calendered vinyl filmsrather than the cast alternative, andalso encouraged the use of thepaint mask or stencilling method.The latter technique, which is thecheapest option available, is nowused to produce logos on a rising10-15 per cent of all new containers(see page 39).However, the overall businesshas clearly been impacted most bythe near wholesale shift of all vinylcontainer decal fabrication toChina. Around 95 per cent of allprinting/conversion work is nowContainer decal manufacturers may have witnessedsome improvement in demand following the recentrecovery in global box production, but they remainunder as much pressure as everChinese State Railways recentlystarted using Ritrama film for itscontainer decalscarried out by a few Chinesecompanies, with producers in allother regions, including SouthKorea, now fast exiting the marketaltogether.Precursor film could also soonbe sourced in greater quantitiesfrom within China, even thoughbuyers have voiced doubts as to thequality of some Chinese film producedto date. The leading internationalsupplier of cast vinyl film,3M Co, established a Chinese subsidiaryseveral years ago, whileAvery Dennison, which producesboth cast and calendered types, isplanning to start manufacturing inShanghai later this year.The new factory is presentlyunder construction and it willproduce Avery Dennison’s rangeof cast (XL1000) and calendered(600 Series) container decal films.All production of these productswill be transferred in stages fromtheir present sites in the US andEurope, with the whole processbeing overseen initially by engineersfrom Avery Dennison. Eventually,according to technical marketingmanager, Chris van deKlugt, the plant will run autonomously,with all raw materialssourced in Asia rather than beingimported from Europe/US.Cost factorPredictably, the decision to set upin China was driven almost whollyby the need to cut production anddistribution costs. As van de Klugtputs it, “China is now home tothe whole container manufacturingprocess and claims the vast majorityof screen printers, so it islogical to relocate our productionto serve this market direct.”The prospect of cheapermanufacturing and more immediateaccess to end-users is expectedto maintain the competitivenessof Avery Dennison in thecontainer market and safeguard itsfuture involvement.Avery Dennison has been aleading supplier of container decalfilm for many years since itsacquisition of the UK Fassonrange. 3M too is a longstandingparticipant, although its involvementin the container sector is indecline. It is apparent that thecompany has been discouraged bythe ongoing fall in margins andinstead concentrated on more lucrativemarkets, including the supplyof vehicle display logos andspecialist reflective materials.3M’s main production centresin the US and Europe have alsostayed with the exclusive manufactureof cast vinyl for containeruse, which remains a relatively expensiveoption. However, itslargely autonomous division inChina, which is increasingly addressingthe needs of the localcontainer market, is not confinedsolely to the supply of cast vinyl.Other important suppliers ofprecursor vinyl are MACtac ofBelgium and Ritrama Groupbased in the UK. MACtac, whichis part of the Bemis Group, a leadingUS manufacturer of flexiblepackaging, is another very wellknown supplier of container decalfilm. Most production is stillcarried out at the company’s mainplant in Belgium and, althoughsales for container end-use makeup only a small part of its overallbusiness, the company is still committedto serving this sector.MACtac has traditionally focusedon the manufacture ofcalendered vinyl, but also introduceda cast version in relativelyrecent years. Despite this, MACtacnotes a recent steady growth in thedemand for calendered productsand continues to strongly promotethe latter range.Export manager Serge Vincartstated that “the specification ofmost calendered films has improvedgreatly during the pastdecade and they today offer thesame mechanical strength andconformability as cast versions.Crucially, though, they are stillcheaper to produce, which explainsthe steady growth in sales[to the container sector].”As with the other suppliers,MACtac has made efforts to limitoverheads and improve its linkswith the dominant market inChina, with just about all vinylWorldCargonewsdestined for use as container decalsnow routed through its branchoffice in Shanghai. A rapidly growingshare is sold direct to localscreen printers and ultimately tomajor container producers.China focusRitrama similarly offers cast andcalendered vinyl versions of decalfilm, and is also continuing to selldirect into China. Customers includeCosco Containerlines,China Shipping Group and, mostrecently, Chinese State Railways.All original manufacturing is stillcarried out in Europe.Ritrama has now been activein the container sector for severalyears and recently extended itsrange to include a series of solvent-basedadhesive products,which were developed to assist theapplication of the finished decalin demanding and extremely lowtemperatureconditions.The innovation is applicable toits entire range of products andcomplements the use of emulsionbasedadhesives. Moreover, thenewly enhanced range comes fullysupported with a seven-year lifetimewarranty and ISO9000 certification.Ritrama technical man-March 2003 37
Page 2 and 3: WorldCargonewsJurong jetty monitori
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Page 9 and 10: PORT NEWSLong range DoverThe UK Por
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Page 29 and 30: HEAVY LIFTWorldCargonewstonne crane
Page 31: INTERMODALWorldCargonewsBig infrast
Page 35: CONTAINER INDUSTRYWorldCargonewsSti

March Front Cover - WorldCargo News Online

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