LINER TRADES TO EUROPE Shipping and container terminal, at the port of Genoa, Italy For <strong>2019</strong>-20 the seasonal pattern will be repeated, with the last weekly southbound sailing already well on its way to Australia and the last northbound due to be that of Seatrade Blue from Melbourne on October 1. No date has been advised for resumption, at time of writing. However, the number of blanked sailings during the <strong>2019</strong> peak export (northbound/eastbound) season has again raised questions over the long-term viability of the weekly service, notwithstanding the excuse given of a shortage of suitable tonnage. Sources say the future of the entire service is again being revisited in Marseilles with those impending IMO 2020 regulations adding to the cost burden of operating a total of 13 small containerships over a very long rotation. The seasonal fluctuations in volume are “challenging”, to say the least, and as has been noted in the last few years’ reviews PAD/ NASP has become increasingly NZ export-focused, such that there have been frequent suggestions the Australian East Coast port The point is that whatever shippers pay today, they must be prepared to pay much more or everything will fall apart. calls at Brisbane, Sydney and Melbourne could be axed, especially given similar transit times to/from Europe available via Suez. (This, however, ignores the importance of the ECNA connections.) Ructions at the Australian stevedore of choice, DPWA, haven’t helped, either. “NZ-driven arrangements for the service have not necessarily been to Australian preferences,” an insider frankly offers.” It’s understandable given the importance of making Zespri’s crucial dates northbound but if there are any delays at all southbound out of Europe, ECNA or the Pacific the inevitable casualty is at least one Aussie port call.” The other consideration said to be threatening PAD/NASP’s viability is the gradual erosion of French Pacific territories’ loyalty to European sourcing of goods, in favour of closer and cheaper Asian products: what was the southbound service’s golden goose is rapidly turning into Peking duck. Nevertheless, “everything is always under review in Marseilles”, one insider suggests, dismissing talk of any immediate cessation: PAD/NASP is certain to continue until the end of the Zespri contract, which has another year to run, and the same alternate weekly/fortnightly sequence will continue, to cope with the Kiwi export seasons. THE Y2K OF SHIPPING? Alas, the uncertainties of the impact of IMO 2020 loom large here, too, and in the words of one executive “underline the fragility of the service”. “There are widely divergent views,” he says. “Some think it’s the Y2K of shipping, others think it will leave some lines – especially the smaller ones – hanging by a thread. “The cost differential between different carriers will be quite wide, due to the relative [fuel] buying power of large versus small. Smaller carriers may not be able to fully pass on the additional costs thanks to the big guys’ market power. “And it’s still not entirely clear what the cost-recovery mechanisms will be, and how they’ll be applied. Included in BAFs or separate? Prospective or retrospective? There are the leaders who’ve already tried to set the agenda but there’s not really commonality there, anyway. And then there will be the followers, who will have to be very fleet of foot or they’ll be left with very little ability to cost recover.” Another senior Europe trade carrier executive expresses bigger picture concerns: “People in general are pointing at the shipping industry as polluters and do not understand that as long as we burn the residues left over from producing gasoline, they can drive their cars. Soon they will discover the equation may turn against them. “The point is that whatever shippers pay today, they must be prepared to pay much more or everything will fall apart. They will have to pay the bill or relinquish their historic freedom to buy from anywhere. “Something has to give.” Luca Rei 30 <strong>September</strong> <strong>2019</strong> thedcn.com.au
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