North Atlantic Container Service - NORA

A PROJECT CO-FUNDED BY
North Atlantic Container Service
Norway-Iceland-North America
–connections to Sweden, Faeroe Islands, Greenland,
Continental Europe, Russia etc
Phase 1: Feasibility study
Project partners:
Mosjøen Industrial Terminal, The Icelandic Maritime The Region of Västerbotten,
Norway Administration, Iceland Sweden
The Port of Mosjøen, The Port of Torshavn, Royal Arctic Line AS,
Norway Faeroe Islands Greenland
Hf. Eimskipafélag Íslands (Eimskip), Maritimt Forum Nord, Transportutvikling AS,
Iceland Norway Norway
April 7. 2010
Transportutvikling AS

North Atlantic Container Service
“Drawing the line on the map is only one percent
of the work connected to the development
of international corridors”
Victor P. Zhukov, Deputy Chairman of OSJD
(UIC Expert Group meeting in Paris, March 14-2008)
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Content
North Atlantic Container Service
Content ________________________________________________________ 3
List of figures ____________________________________________________ 5
List of tables ____________________________________________________ 5
Acronyms and abbreviations ________________________________________ 6
1 Preface ______________________________________________________ 7
2 Executive summary ____________________________________________ 8
3 Background and objectives _____________________________________ 14
3.1 Project background _______________________________________________ 14
3.2 Duration _______________________________________________________ 15
3.3 Project visions, goals and objectives _________________________________ 15
3.4 Organization and participants _______________________________________ 15
3.5 Methodological approach __________________________________________ 16
3.6 Introduction to the feasibility study __________________________________ 17
4 Logistical status and existing container services _____________________ 18
4.1 The ports in the region ____________________________________________ 18
4.1.1 Mosjøen (Norway) ______________________________________________________ 18
4.1.2 Reykjavik (Iceland) _____________________________________________________ 20
4.1.3 Reydarfjordur (Iceland) __________________________________________________ 21
4.1.4 Torshavn (Faeroe Islands) _______________________________________________ 22
4.1.5 Nuuk (Greenland) ______________________________________________________ 24
4.1.6 Port at the North American East Coast ______________________________________ 24
4.1.7 Other ports ___________________________________________________________ 25
4.2 The shipping lines in the region _____________________________________ 26
4.2.1 Eimskip (Iceland)_______________________________________________________ 26
4.2.2 Eimskip-CTG (Iceland/Norway) ____________________________________________ 26
4.2.3 Faroe Ship (Faeroe Islands) ______________________________________________ 27
4.2.4 Samskip (Iceland) ______________________________________________________ 27
4.2.5 Royal Arctic Line (Greenland) _____________________________________________ 27
4.2.6 Various Lines (Norway) __________________________________________________ 28
4.3 Existing container services _________________________________________ 28
5 The transportation concept – logistical components __________________ 30
5.1 Logistical idea and benefits ________________________________________ 30
5.2 The ocean legs – main route ________________________________________ 31
5.3 The transshipment operation on Iceland ______________________________ 32
5.4 Ports __________________________________________________________ 34
5.5 Sea routes connected to the main line ________________________________ 34
5.5.1 Faeroe Islands _________________________________________________________ 34
5.5.2 Greenland ____________________________________________________________ 35
5.5.3 Norway/Mosjøen _______________________________________________________ 35
5.5.4 Russia – synergy & connections ___________________________________________ 35
5.6 Hinterland connections in Norway ___________________________________ 36
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North Atlantic Container Service
5.7 Intermediaries/forwarders/organization/information etc _________________ 38
6 A possible service – transportation product _________________________ 39
6.1 Sea routes ______________________________________________________ 39
6.2 The vessel size & operational consequences ____________________________ 39
6.3 The Westbound route _____________________________________________ 41
6.4 The Eastbound route ______________________________________________ 42
6.5 A preliminary route indication ______________________________________ 43
7 The market __________________________________________________ 45
7.1 Population ______________________________________________________ 46
7.2 Foreign trade – national figures _____________________________________ 48
7.3 Foreign trade (volume) – weighted by population shares__________________ 50
7.4 The regional industry structure and market potential ____________________ 51
7.5 Market seminar __________________________________________________ 53
7.6 Competition ____________________________________________________ 54
7.6.1 Competing alternatives __________________________________________________ 54
7.6.2 Transit times and frequency ______________________________________________ 54
7.6.3 Transport subsidies _____________________________________________________ 56
7.6.4 Rates ________________________________________________________________ 56
7.7 The market – preliminary conclusions ________________________________ 58
8 Financial & commercial viability __________________________________ 60
9 Challenges – issues to be solved _________________________________ 61
9.1 Changing the charter party and Alcoa logistics __________________________ 61
9.2 Service description – development ___________________________________ 61
9.3 Commercial conditions and competition _______________________________ 61
9.4 The market _____________________________________________________ 61
9.5 The vessel and operational consequences _____________________________ 62
9.6 Organizational challenges __________________________________________ 62
10 Recommendations & progress __________________________________ 63
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List of figures
North Atlantic Container Service
Figure 3-1: Deviation ______________________________________________________________ 14
Figure 3-2: Organization ____________________________________________________________ 15
Figure 3-3: The project - development process __________________________________________ 16
Figure 3-4: The feasibility study - activities _____________________________________________ 17
Figure 4-1: The Port of Mosjøen (2010) ________________________________________________ 18
Figure 4-2: BBC Reydarfjordur calling the existing Alcoa quay in Mosjøen _____________________ 19
Figure 4-3: Section of the new quay in Mosjøen (2009) ___________________________________ 19
Figure 4-4: Eimskip's office in Sundaklettur, Reykjavik ____________________________________ 20
Figure 4-5: The Port of Reykjavik - Sundahöfn (2009) ____________________________________ 20
Figure 4-6: Alcoa Fjarðaál ___________________________________________________________ 21
Figure 4-7: New container quay in Mjóeyri (planned) _____________________________________ 21
Figure 4-8: The Port of Reydarfjordur/Mjóeyri (August 2009) _______________________________ 22
Figure 4-9: Mobile crane for container handling (Mjóeyri, August 2009) ______________________ 22
Figure 4-10: The Port of Torshavn - winter (2009) _______________________________________ 23
Figure 4-11: The Port of Torshavn - summer (2009) ______________________________________ 23
Figure 4-12: The Port of Nuuk (2009) _________________________________________________ 24
Figure 4-13: The Port of Halifax ______________________________________________________ 25
Figure 4-14: Eimskip-ocean services (2009) ____________________________________________ 26
Figure 4-15: Eimskip-CTG’s ocean services (2009) _______________________________________ 26
Figure 4-16: Faeroe Ships ocean services (2009) ________________________________________ 27
Figure 4-17: Royal Arctic Lines ocean services (2009) _____________________________________ 28
Figure 4-18: Present container services in the North Atlantic _______________________________ 29
Figure 5-1: The new North Atlantic Container Service and its connections _____________________ 30
Figure 5-2: Godafoss _______________________________________________________________ 32
Figure 5-3: BBC Reydarfjordur _______________________________________________________ 32
Figure 5-4: Reykjafoss _____________________________________________________________ 32
Figure 5-5: Transshipment alternatives Reydarfjordur - Reykjavik ___________________________ 33
Figure 5-6: NCL’s “Clarissa” (323 TEU) _________________________________________________ 35
Figure 5-7: Eimskip-CTG’s “Polfoss” (14 FEU/28 TEU) _____________________________________ 35
Figure 5-8: Sea transports Murmansk - NAEC ___________________________________________ 36
Figure 5-9: Mosjøen – hinterland connections ___________________________________________ 37
Figure 5-10: Port of Mosjøen – road connections to Sweden/Finland _________________________ 37
Figure 6-1: Increased volumes – impact on vessel size and handling times/storing capacity ______ 40
Figure 6-2: Westbound route – logistical scheme ________________________________________ 41
Figure 6-3: Eastbound route – logistical scheme _________________________________________ 42
Figure 6-4: NACS – route concept and transit times (main line) _____________________________ 43
Figure 7-1: Global security __________________________________________________________ 45
Figure 7-2: Population – market area __________________________________________________ 46
Figure 7-3: US East Coast ___________________________________________________________ 47
Figure 7-4: Canadian East Coast ______________________________________________________ 47
Figure 7-5: Norwegian merchandise trade – totals ex oil & oil products _______________________ 48
Figure 7-6: Swedish merchandise trade - totals __________________________________________ 49
Figure 7-7: NAEC merchandise trade - value ____________________________________________ 49
Figure 7-8: NAEC merchandise trade and population _____________________________________ 50
Figure 7-9: Container balance per trip/per ocean route____________________________________ 51
Figure 7-10: Industry and trade flows – Nordkalotten _____________________________________ 52
Figure 7-11: Information leaflet - market seminar in Umeå ________________________________ 53
Figure 7-12: Rate composition - example _______________________________________________ 57
List of tables
Table 5-1: Distances and sailing time .......................................................................................... 31
Table 6-1: Sailing times, existing and new route .......................................................................... 40
Table 6-2: Example: westbound sailing ....................................................................................... 44
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North Atlantic Container Service
Table 7-1: Population – market area ........................................................................................... 46
Table 7-2: Population shares – market area ................................................................................. 50
Table 7-3: Maximum TEU potential based on population shares and Norwegian/Swedish trade ........ 50
Table 7-4: Container balance per trip/per country ........................................................................ 51
Table 7-5: Västerbottens and Norrbottens share of Sweden (%) ................................................... 52
Table 7-6: ACL’s westbound North America schedule from Gothenburg (Departure times) ............... 55
Table 7-7: ACL’s North America Service - transit times .................................................................. 55
Table 7-8: Transit time Northern Sweden/Norway – Port of Halifax ................................................ 55
Table 7-9: Transport subsidies in Sweden .................................................................................... 56
Table 7-10: Through rates Northern Sweden/Norway – US (40 ft DC) ............................................ 57
Acronyms and abbreviations
AON Corporation providing Risk Management and other services
CBP US Customs and Border Protection
DC Dry container
Dwell time Number of days where the container is stored at the ocean terminal
EATL Europe Asia Transport Links
EU The European Union
EUR European Currency
FCL Full Container Load
FEU Forty Foot Equivalent Unit
FIFO First in-first out
GDP Gross Domestic Product (various definitions)
IMF The International Monetary Fund
ISPS The Internasjonal Ship and Port Security code
LIFO Last in - first out
MCS Murmansk Commercial Seaport
MPMC Murmansk Port Mangement Company
NACS North Atlantic Container Service
NAEC The North American East Coast
NVOCC Non Vessel Operation Common Carrier
P.y. Per year
RF Reefer container
RZD The Railways of the Russian Federation
STS crane Ship-to-shore crane
TEU Twenty Foot Equivalent Unit
USD United States Dollar
USEC The East Coast of the United States
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1 Preface
North Atlantic Container Service
The development of new East-West transport solutions is of great importance for the industry and
population in the Northern regions. The markets are often far away, and the distance to the customers
and suppliers is consequently a challenge. At the same time relevant transport alternatives using the
shortest distance are often lacking.
The NACS project (North Atlantic Container Service) aims to develop a new intermodal east-west
transport route between Norway-Iceland and North America. This route will be linked to existing
hinterland connections in Sweden, Norway and Finland (east) and North America (west).
This route will also create a new opportunity for Faeroe Islands and Greenland by linking existing
routes to the NACS-corridor.
Developing new transport routes takes time and requires persistence. We believe that the North
Atlantic Container Service is possible to realize as there at present is both existing volumes and
existing routes in operation.
The main challenge is to connect the two routes (Norway-Iceland and Iceland North America) into a
seamless chain and bring in some new containers to defend the costs of a slightly larger vessel.
We would like to thank NORA and the project partners for their contributions during the project period.
April 7. 2010
Einar M. Andersen /s/
Mosjøen Industrial Terminal
Managing Director/Project chairman
Stig Nerdal /s/
Transportutvikling AS
Project manager
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2 Executive summary
Background and objectives (3)
North Atlantic Container Service
The overall project background is a strong national and international focus on intermodality,
container transports and lack of East-West services in the North Atlantic. There are existing routes
but some of them do only cover the industrial market segment. These “industrial” ships can be
utilized for a wider purpose (other customers), which can cover a larger market segment than only
industrial transports. It is important to note that the potential market in the north not necessarily
has to satisfy the full capacity of a container ship, since base-freight and operational container ships
are already in operation between Mosjøen and Reydarfjordur, Reykjavik and North America and
there are existing connections to/from Greenland and Faeroe Islands. However, they should be
further developed and integrated. This is a unique position. By linking existing services together, a
new concept/service can succeed.
Iceland, as an island, has a strategic position in the Atlantic Ocean. Iceland depends on various
seaborne transport solutions, as well as serving an important transshipment function for a wider
market. The geographic location of Mosjøen (eastern part of the NORA region) and existing
transport infrastructure do also indicate that a larger regional market in Norway and Sweden can be
served, -and probably also some regions of Finland.
The duration of this feasibility study was approximately 8-10 months and it was completed by
March 2010.
The long term goal is to develop a new, balanced, and commercial viable transport service based
on an East-West structure through the port of Mosjøen and Iceland. As a consequence of this main
structure it is an ambition to connect feeder systems (existing or new) to Greenland and the Faeroe
Islands.
The objectives (shorter term) are to evaluate the opportunity (this feasibility study). .
The project is partly funded by NORA and the organization consists of a Management Committee,
Competence/reference group and a Project Manager. The Management Committee is chaired by Mr.
Einar M. Andersen, the Managing Director of Mosjøen Industrial Terminal. In addition, the following
organizations have been involved: The Icelandic Maritime Administration, Region Västerbotten, The
Port of Mosjøen, Eimskip, Royal Arctic Line, the Port of Torshavn and others.
The project manager has been Mr. Stig Nerdal (Transportutvikling AS). He has been assisted by
staff from Transportutvikling AS.
Logistical status and existing container services (4)
This chapter includes a short description of ports and the existing ocean services. The following
ports where introduced: Mosjøen, Reykjavik, Reydarfjordur, Torshavn and Nuuk. In addition, ports
like Argentia, Halifax, Everett, Richmond and a few Norwegian ports are briefly mentioned.
It is also made an introduction to the shipping lines in the region, mainly Eimskip and Eimskip-
related companies (Eimskip-CTG and Faeroe Ships). Comments are also made on Royal Arctic Lines,
Samskip and various Norwegian Shipping Lines. The present services are illustrated in a separate
map.
The transportation concept – logistical components (5)
The basic idea is to establish an alternative, east-west, intermodal transport solution in the North
Atlantic based on an ocean service between the Port of Mosjøen in Norway, ports on Iceland for
transshipment operations and ports at the North American East Coast (NAEC). This main route may
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North Atlantic Container Service
be connected to other regions in the North Atlantic region (Greenland and Faeroe Islands) through
feeder services. It is furthermore possible to connect services to/from Europe and North West
Russia to the route.
The main opportunities connected to the new transport concept are:
• The market will be introduced to a new transport alternative
• There is a potential for lower costs, particularly for some market segments. Well developed
and managed, it is believed that the new transport concept could be an economically feasible
alternative.
• Current routes between Sweden/Norway and NAEC represent a deviation and the new
transport concept could be developed into a faster transport service due to shorter distance for
most market segments. There is a potential for time savings.
• Greenland and Faeroe Islands could be linked to the main route. A new alternative to Northern
Norway/Sweden will show up (eastbound) and by increasing the volumes on the westbound
trade, better frequencies may occur.
• There are potential synergies with other routes and ports, for instance new ocean routes from
Murmansk (Russia), North-South routes along the Norwegian Coast etc
• It is important to note that there is base-freight between Mosjøen and Reydarfjordur and
between Reykjavik and NAEC. NACS is not starting on scratch since the additional income from
the new service does not have to cover 100% of the costs, only the marginal costs, to be
profitable. The ambition is to put the separate elements (ocean routes, ports etc) of the
logistical chain together and show the customers one product and a seamless chain.
• The route will have positive impact on business development in the Northern region,
particularly connected to ports like Reydarfjordur and Mosjøen.
Several sea routes (Faeroe Island, Continent, Norwegian Coast, Greenland etc) are connected to
the main route Mosjøen-Iceland-North American East Coast.
The existing route to North America from Iceland originates in Reykjavik. A transportation chain
from Norway to North America by using this route requires that the container is moved between
Reydarfjordur to Reykjavik (transshipment).
In principle this can be done by several alternatives, but probably the best alternative is a deviation
of the Mosjøen-Iceland ship from Reydarfjordur to Reykjavik. This requires only on transshipment
operation in Reykjavik.
The hinterland connections to Mosjøen are well developed. Mosjøen has rail connections northsouth
and excellent road connections in all relevant directions. Mosjøen is located along the E6
(north-South road connection between northern Norway and Rome) and 2-3 different road
connections to Sweden, and further to Finland (and Russia) by a ferry connection (Umeå-Vaasa).
The majority of cities in Västerbotten in Sweden can be connected to Mosjøen by truck within less
than 8 hours.
A broad set of intermediaries/forwarders can be used to support the new transport solution.
A possible service – transportation product (6)
The present rotation between Iceland (Reykjavik) and four ports at the NAEC is 28 days (Reykjavik-
Reykjavik), while the present rotation between Mosjøen and Iceland (Reydarfjordur) is 7 days. The
ambition is to change the rotation to Mosjøen-Reydarfjordur-Reykjavik (westbound) for connections
to the above mentioned NAEC- route from Reykjavik. The roundtrip (Mosjøen-Mosjøen) will be
approximately 9 days and the sailing time between Reydarfjordur and Reykjavik approximately one
day. The Eastbound trip from Reykjavik runs directly to Mosjøen without calling at Reydarfjordur.
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North Atlantic Container Service
It may be possible to make the detour Reydarfjordur-Reykjavik once a month as an alternative to
the regular 9-day connection.
The route concept depends on a slightly larger vessel between Mosjøen and Iceland, because the
rotation will change and additional capacity for new containers is required. The present vessel has a
capacity of approximately 170 TEU’s while the new system requires a ship carrying approximately
250 TEU’s. This calculation is based on the assumption of 30 TEU’s (from new customers) per trip.
Based on the assumptions made, Argentia can be connected to Mosjøen, every 3-4 week, within 10
days and Richmond within 17 days. Iceland can be connected to Mosjøen every 9 day. When the
frequency between Iceland and North America improves, NACS, as a logistical chain, will improve.
The through time between Mosjøen and Richmond (US) is 15-16 days and 9-10 days to Canada.
The market (7)
Macro conditions (politics, economy, legislation etc) influence any transportation concept and the
viability of the transport corridor. These conditions are important as they have impact on the
corridor’s business climate and market conditions. It is important to note that the new transport
concept will run through countries where the risk is considered as low (green/grey areas).
The preliminary market conclusions indicate a market potential to/from Sweden/Norway of 4-500
TEU’s per 9 day rotation. The majority of the containers is westbound and goes between
Norway/Sweden and North America/Iceland. Faeroe Islands will contribute with some containers
while Greenland has a limited potential. On a shorter term perspective the volumes will be lower
and a share of the potential will use other transport alternatives.
The competing transit time to North America (Halifax) is 15-20 days. This transit time is possible
to match, but not on a weekly frequency. The through time is limited by the existing rotation
between Reykjavik and NAEC. At present NACS can match the competing alternatives every 28 day.
When the frequency between Iceland and NAEC improves, the NACS’ competitive position will
improve.
The transit time to and from Iceland, compared to the alternatives, will be substantially improved
and the frequency will be competitive. For many alternatives the transit time will be reduced by
more than 50%. The transit time to/from the Faeroe Islands will also be reduced, due to quite good
connection between Iceland and the Faeroes. Greenland is more complicated due to lack of
frequencies between Iceland and Greenland.
The through rates between Northern Sweden/Norway to/from NAEC are strongly influenced by the
cost of pre-/on carriage. A transport distance of 1000-1500 km is required to connect a
Scandinavian base port. At present, a 40ft DC container can be transported from the north to NAEC
for approximately USD 4 000 and from NAEC at a through rate is probably 15% lower. The land
transport portion of the rate is 30-40%.
Rates are volatile and influenced by market conditions, customer volumes and various other
conditions. Larger companies may have a better rate and smaller companies can pay more for the
transports. By using the right vessel and securing some additional cargo/customers, NACS should be
competitive when it comes to rates, for market players in northern Sweden/Norway.
The main reasons are:
• There is base freight (Alcoa) on the Norway-Iceland route. Only incremental costs (larger vessel,
some extra nautical miles, sales etc) have to be covered.
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North Atlantic Container Service
• The pre-/on carriage cost will be substantially reduced by using the port of Mosjøen, compared
with the existing cost of connecting a Scandinavian base port. Even if NACS cannot match the
ocean freight, the total rate can be matched due to drayage/delivery cost portion of the rate.
If NACS can match the Northern Norway/Sweden – NAEC rates, it should also be able to match the
rates to/from Iceland and Faeroe Islands.
Rates are influenced by Swedish transport subsidies. Subsidies can be obtained if the transport
distance between the origin/destination in Sweden and Mosjøen is above 401 km. But, the distance
to Mosjøen is shorter than the distance to for instance Gothenburg, which should have positive
impact on the land transport rate. The Swedish transport subsidies favors domestic transport
alternatives inside Sweden.
Competitive rates, for NACS and for the NAEC trade, are more important than transit times. This is
due to the fact that there seems to be only minor differences in best-case transport time and that
the existing alternatives have a better frequency.
Financial & commercial viability (8)
The route’s financial and commercial viability has to be evaluated in detail throughout the next
phase of the project work. Such evaluation should also include a risk analysis.
In principle, the cost side of the new route is (probably) connected to the introduction of a larger
ship between Mosjøen and Iceland and the change in rotation (hours and calls).
Vessel capacity Mosjøen-Reydarfjordur
The new vessel requires some larger TEU-capacity than the existing ship, due to fewer rotations
and additional cargo (new containers). There are some costs connected to increased capacity.
Based on the assumptions used, the new vessel capacity is at least 250 TEU (+ 80 TEU’s).
Distance and time consumption
The present roundtrip (Mosjøen-Reydarfjordur-Mosjøen) is 1 380 n.m. while the new roundtrip
(Mosjøen-Reydarfjordur-Reykjavik-Mosjøen) is 2.000 n.m. (+ 45%). Due to the reduction in the
number of rotations, the annual production (n.m.) will increase by 13%. The sailing distance will
also have an impact on the time consumption (main engine on) and increased volumes from new
customers will also influence the handling time at the ports where new containers are
loaded/unloaded.
Vessel operating costs
In the present (2009/2010) market, the TC rate for a 170 TEU ship and a 250 TEU ship are
approximately the same. This is not the usual picture and based on a longer term evaluation of the
market, the increase in TC- rate may be +USD 500-1000 per day. By assuming that the travel
dependent costs are 50% of the TC-rate, the cost increase (TC rate surplus + travel dependent
costs) per year is approximately USD 270.000 – 540.000 per year.
A potential viable business
30 new TEU’s per round trip is 60 single trip containers, which is 2.460 average 1 single trip
containers per year.
If the new service is able to capture 2.460 new FCL containers and the increased cost is max. USD
540.000, the average cost is USD 160 per container between Norway and Iceland.
1 Average means the average of all containers independent on commodity, destination etc
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North Atlantic Container Service
Even though these simplified calculations do not take into consideration the risk of running the
business, overhead costs, profits, that there will be empties, container costs, sometime 10 TEU
instead of 30 etc, - it shows a potential.
USD 160 per container/TEU represents low operational vessel costs (marginal costs). It is
comparable with the full capacity vessel costs of operating among the largest deep-sea container
vessels of today. The reason is that the service is in operation, there is base freight and that we
only have to cover the incremental costs.
Furthermore, when the idea is that the Norway-Iceland service shall add volume to other existing
routes (like Iceland –North America, routes to the Faeroe Islands, along Norwegian Coast etc),
these routes may increase their revenue at a low variable cost basis (handling etc), - if there is
available capacity. There are obvious synergies connected to the concept.
Challenges – issues to be solved (9)
There are several tasks which have to be solved prior to the commercial operation. The report has
discussed the following issues:
The charter party on the route Mosjøen-Reykjavik is operated by commercial players. It is of
crucial interest that the new concept is beneficiary for, and accepted by, Alcoa and Eimskip. Alcoa
and Eimskip have to accept a change in the Charter party’s conditions (vessel size and rotation).
The service description in this document is an idea and not a product ready for sale. The service
has to be further developed and detailed.
As a part of the service description the commercial conditions have to be shown. Such conditions
are rates (various trades, commodities and container sizes), transit times, frequencies etc.
Frequency and through transit times are challenges. Rates may therefore be more important at the
initial stages of the development of the service, as low rates, to some extent, may compensate for
low frequency.
A more detailed market evaluation has to be conducted prior to commercial operation. This
market study has to be based on the developed product and commercial conditions (rate, time etc).
Specific/targeted customers should be approached.
The increased number of containers influences handling time at the terminals, storage, logistical
procedures and consequently the vessel rotation. The change of vessel requires another vessel
than the present. Availability of a relevant vessel has to be checked.
There will be various organizational issues to handle; like the role of forwarding, sales
organization etc. Committed partners have to be involved throughout the development.
Recommendations & progress (10)
We believe that NACS is an opportunity. In reality, a rather unique opportunity in the north, since
this transport concept has base freight and existing vessels in operation.
Logistically, a main challenge is to connect the two rotations into a system where there are
acceptable frequencies and a competitive rate. If the frequency/transit time is not acceptable to the
market, the customer has to be compensated with lower rates. Low frequency and high rates is
not a combination which can be offered to the customers.
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North Atlantic Container Service
Furthermore, NACS cannot be successful if Alcoa’s own logistical priorities suffer, and the Mosjøen-
Reydarfjordur route continues to operate as a plain industrial service. It is very important to work
with Alcoa and develop a concept where Alcoa is comfortable.
Based on Alcoa’s acceptance and commitment from partners, the project will be ready to
continue into phase 2.
The basic elements in phase 2 are:
1. A meeting between the project initiators (Port of Mosjøen, Mosjøen Industrial Terminal,
Icelandic Maritime Administration), Alcoa and Eimskip, where the ambitions are to discuss the
challenges/opportunities and further progress.
2. Based on a positive outcome from the meeting, a “business plan” should be developed. The
important elements are:
• A detailed service description (the product) has to be developed.
• All other business plan issues like finance, organization, risk etc
• Various consequence and risk evaluations
3. A market approach, based on the developed service description
4. Assuming positive market feedback, the practical operation/service could commence
The meeting should be held prior to summer 2010 and the “business plan” should be completed
within a period of 6-8 months subsequent to acceptance and funding of the work.
We do also recommend that the port of Mosjøen continues with their port development
projects connected to container handling. The work should at least include STS-operation, access
to sufficient space/storage areas on shorter/longer term and logistical/stevedoring procedures. A
project where the port of Mosjøen and the port of Reydarfjordur are cooperating is probably a
benefit.
Container transport is a derivate. It is a consequence of business development and cooperation
among people and the industry. A transport conference for the NORA region (and connected
markets), where NACS has an important role, may be of great value for the further development of
NACS.
We believe that both the business plan for NACS and a transport conference could be co-funded by
NORA, as work progresses from the initial project (this feasibility study).
Concept and ideas “die” if they are not kept alive. Based on a positive acceptance from Alcoa, we
believe that it is important to move fast into the next phases on the NACS development.
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3 Background and objectives
North Atlantic Container Service
Below is a short presentation of the project background, time schedule, goals & objectives,
organization and methodological approach.
3.1 Project background
The overall project background is, among other issues, a strong national and international focus on
intermodality, particularly east-west ocean services and containers as the loading unit.
Furthermore, an ambition is to focus on the North Atlantic region and the development of sustainable
ocean transports connected to the hinterland (like environmental friendly rail connections at some
ports) and between the various “islands” in the region. There are existing routes but some of them do
only cover the industrial market segment. These “industrial” ships can be utilized for a wider purpose
(other customers), which can cover a larger market segment than only industrial transports.
ACL’s
North America route
NACS
©Transportutvikling AS, 2010
DEVIATION
A similar commercial interest for
an ocean going east-west
transport, as in Norway, is found
in Northern Sweden. The present
transport solutions (for instance
to North America) have to be
routed through
southern/continental European
ports for transshipment prior to
any arrival at the North American
East Coast. Consequently, the
feeder costs to southern base
ports are often higher than the
Trans-Atlantic rate. The same
deviation usually occurs if the
destination is Iceland and other
North Atlantic locations.
Figure 3-1: Deviation
Iceland, as an island, has a strategic position in the Atlantic Ocean. Iceland depends on various
seaborne transport solutions, as well as serving as an important transshipment function for a wider
market.
Faeroe Islands and Greenland represent smaller cargo volumes and these countries do also depend on
integration with other routes, hubs and regions to create a satisfactory volume-base for more frequent
and commercial viable services.
It is known that there are potential customers who are in a position to utilize a new service and
connections. The market (size, commodities, balance, rates etc) is not fully known and cannot be
verified without market studies. It is important to notify that this potential market not necessarily has
to satisfy the full capacity of a container ship, since base-freight and operational container ships are
already in operation between Mosjøen and Reydarfjordur, Reykjavik and North America and there are
existing connections to/from Greenland and Faeroe Islands. However, they should be further
developed and integrated. This is a unique position. By linking existing services together, a new
concept/service can succeed.
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North Atlantic Container Service
The geographic location of for instance Mosjøen (eastern part of the NORA region) and existing
transport infrastructure do also indicate that a larger regional market in Norway and Sweden can be
served, -and probably also some regions of Finland.
3.2 Duration
The duration of this feasibility study was approximately 8-10 months and it was completed by March
2010.
3.3 Project visions, goals and objectives
The long term goal is to develop a new, balanced, and commercial viable transport service based on
an East-West structure through the port of Mosjøen and Iceland. As a consequence of this main
structure it is an ambition to connect feeder systems (existing or new) to Greenland and the Faeroe
Islands.
The objectives (shorter term) are to evaluate the opportunity and to prepare the conditions for a small
scale service based on existing infrastructure and suitable vessels, as well as improving the logistical
network in the North Atlantic region.
The expected outcome of the project work is to produce an evaluation of the opportunity, the market,
the logistical concept and various issues which are critical to the success of the service.
It is important that a future concept not only is beneficial for one or a few organizations, but to several
players in the logistical chain, -including the “owners” of the existing transport concept between
Mosjøen and Reydarfjordur. The benefits of Eimskip and Alcoa should be clearly identified and
focused on.
The tasks to be performed during the feasibility study, which shall contribute to the above mentioned
goals/objectives, are presented in chapter 3.6.
3.4 Organization and participants
A successful project development depends on active contributions from the project partners.
The organization consists of a Management Committee (Prosjektfølgegruppe), a
Competence/reference group and a Project Manager. The Management Committee is chaired by Mr.
Einar M. Andersen, the
Managing Director of
Project committee (Prosjektfølgegruppe)
Mr. Einar M. Andersen, Managing Director, Mosjøen Industry terminal, Norway
Mr. Gísli Viggósson, Director of Research and Development, The Icelandic Maritime Admin., Iceland
Ms. Sigríður Þorgrímsdóttir, Byggdastofnun, Iceland
Mr. Mårten Edberg, Chief Transport POlanner, Region Västerbotten, Sweden
Mr. Kurt Jessen Johansson, Managing Director, The Port of Mosjøen, Norway
PROJECT OFFICE & SECRETARIATE
Project Manager: Mr. Stig Nerdal
Staff from Transportutvikling AS and
Transportutvikling Bodø AS
REFERENCE GROUP
Mr. Steingrímur Sigurðsson,
Hf. Eimskipafélag Íslands (Eimskip), Iceland
Mr. Niels Clemensen,
Royal Arctic Line AS, Greenland
Mr. Jónsvein Lamhauge
The port of Torshavn, Faeroes Islands
Mr. Tor Husjord
Maritimt Forum Nord/Redriforbundet, Norway
Mosjøen Industrial
Terminal. The project
manager has been Mr. Stig
Nerdal (Transportutvikling
AS). He has been assisted
by staff from
Transportutvikling AS. The
Competence group
consists of highly
professional people from
the ports and shipping
industry.
The organization is shown
in figure 3-2.
Figure 3-2: Organization
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North Atlantic Container Service
During the project period, 3 Project Committee meetings have been held (Iceland, Sweden and
Norway). A market seminar was held in Umeå on January 26. 2010 (see chapter 7.5).
3.5 Methodological approach
The method, in general, is based on an analytical approach where desk studies and theory are
combined with the commercial partners’ practical experiences and competence. The entire project
development intends to be conducted throughout 3 main phases, where phase 3 is commercial
operation.
Phase 1 is this feasibility study, where the purpose is to describe and evaluate the concept. This
feasibility study is a start-up document and further evaluations/studies will usually be required before
entering into phase 2. More than one feasibility study may be required. Based on the feasibility
studies, the decisions to enter into phase 2 will be taken.
Phase 2 concerns the development of a business plan and any required preparations for the
commercial operations. The business plan is the decision making platform for entering into the
commercial service or an intermediate demonstration period (demonstration run).
Phase 3 is implementation of the concept/commercial operation.
The illustration shows the various phases.
www.transportutvikling.no
Feasibility study
•Draft service/idea
•Feasibility and evaluation
•Service description
•Market studies
•Evaluation
•Progress proposals
•Decisions
•Etc
Development process
New Container-service Container service in the North Atlantic
Development phase
•”Business planning”
•Organization
•Details logistics, market etc
•Commercial agreements
•Risk evaluations
•Funding issues
•Decisions
•Etc
Time
Implementation
•Starting up the service
Phase 1 Phase 2
Phase 3
Figure 3-3: The project - development process
OK OK
This report is related to phase 1, - the feasibility study
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3.6 Introduction to the feasibility study
North Atlantic Container Service
A feasibility study is the first step to be taken in the development process. It aims to lead into the
preparation of a business plan for the transport service. The feasibility study is based on methods
developed by Transportutvikling AS. The issues shown in figure 3-4 are discussed during the project
period.
www.transportutvikling.no
©Transportutvikling AS
Development process intermodale corridors
Step 1: THE FEASIBILITY STUDY
Market feasibility &
competition
Operational feasibility and
interoperability
Macro environment, political &
administrative conditions
Initial activities (planning,
partnerships etc)
Description of the project and
logistical idea
Evaluations and study conclusions
Next steps, business model and
basics for the business plan
Technical feasibility &
infrastructure requirements
Organizational and managerial
feasibility
Financial & commercial feasibility
Risk issues Environment and external costs
Other specific issues Other specific issues
These activities
represent the main
project steps, -starting
with the market, then
logistics, commercial
conditions etc.
Network building and
partnerships are also
important elements
supporting the future
project work.
Figure 3-4: The feasibility
study - activities
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North Atlantic Container Service
4 Logistical status and existing container services
This chapter includes a short description of ports and the existing ocean services.
4.1 The ports in the region
The description focuses on those ports which are directly connected to the transportation service. A
few other ports are mentioned throughout the description.
4.1.1 Mosjøen (Norway)
The port of Mosjøen is the largest (by tons) container port in Northern Norway, the fourth largest drybulk
port and number 3 when it comes to general cargo. In 2008 the port handled a total of ca. 1,2
mill. tons. There are only 1,5 employees at the Port Authority because stevedoring and port logistics
are handled by commercial players like the Mosjøen Industrial Terminal.
The port of Mosjøen is located in the middle of Norway, in Nordland County.
Figure 4-1 shows the port of Mosjøen and Alcoa’s production facility. The container port is located in
connection to the alumina plant.
Figure 4-1: The Port of Mosjøen (2010)
Existing
and new berth
Alcoa production
facilities
Berth specifications and maritime conditions
The length of the container berth (existing berth) is 270 meter and the maximum ship draft is 10,5
meter (based on 0,5 m. under keel clearance).
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North Atlantic Container Service
Figure 4-2: BBC Reydarfjordur calling the existing Alcoa quay in Mosjøen
It is possible to utilize a new quay (which is recently completed) on the opposite side of the existing
berth. The new quay is 90 m long and the maximum ship draft is 8 m.
The port is sheltered and the maritime conditions are good.
Terminal area
Figure 4-3: Section of the new quay in Mosjøen (2009)
The on berth storage area is limited, but
satisfactory for a small scale container
transport. There are adjacent storage
areas which can be utilized. Adjacent areas
are, to some extent, challenged by a ferry
berth and its road connections. The ferry
will be re-located and additional space will
be available.
The picture shows a section of the new
container quay. The existing quay is
located to the left and the new quay front
(not visible on the picture) to the right.
Equipment
The port is equipped with a rail-mounted “Molde kran” (1989). At present the crane handles 15 lifts
per hour. The crane can handle 35 tons on 11 m. outreach and 20 tons on 30 m. outreach.
The moving equipment at the port consists of two 32 tons SMW forklifts able to stack two-high. The
port is also equipped with a Kalmar terminal Tractor for the purpose of longer distance moves.
Operators
The berths are partly owned by Alcoa and partly by the municipality of Vefsn. Mosjøen Industrial
Terminal (MIT) organizes stevedoring and the terminal operation.
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Connections
The port has good road and railway connections, as well as regular north-south short sea services.
See chapter 5.6 for “hinterland connections” in Mosjøen.
4.1.2 Reykjavik (Iceland)
Reykjavík is Iceland’s principal seaport, with facilities for handling all types of cargo and a
comprehensive range of maritime support services. In addition, Reykjavík is Iceland’s number one
cruise port. The port area is owned by
Faxaflóahafnir sf, Associated Icelandic Ports (AIP).
AIP has developed the Sundahöfn to utilize its
potential. Reclamation work has been carried out to
develop additional land for container handling. A
new 450 meter multipurpose quay, the Skarfabakki,
was opened in 2007 and a new 25 hectare
container storage area, linking the terminals of
Eimskip and Samskip, is due to enter into service in
2011.
Figure 4-4: Eimskip's office in Sundaklettur, Reykjavik
From 1968 Iceland’s most important import-export operations have been carried out at the Sundahöfn
Port facilities. Cargo handling takes place on the Sundahöfn harbor complex, east of the city centre.
Here, Iceland’s two largest shipping companies, Eimskip and Samskip, operate major container
terminals and offer warehousing and logistics support. The port handles some 230,000 TEU.
The port/operators have all suitable berths, equipment, storage areas, warehousing and service
systems to handle the container service. Eimskip handles all operations at their section of the
Sundahöfn port.
The Eimskip area is
approximately 29 hectare and
the ship draft is 9,5 m at the
Eimskip berth. Crane moves
per hour are indicated to 28.
Figure 4-5 shows the
Sundahöfn section of the port
of Reykjavik. Eimskip’s
terminal area is marked by a
red circle.
There are excellent road
connections to/from the
terminal area.
Figure 4-5: The Port of Reykjavik -
Sundahöfn (2009)
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4.1.3 Reydarfjordur (Iceland)
North Atlantic Container Service
Reydarfjordur is located on Eastern Iceland, approximately 700 km by road from Reykjavik. The Alcoa
Fjardaal aluminum smelter is located to Mjóeyri a few km east of Reydarfjordur. The plant was
officially opened in June 2007. This project is Alcoa's first new primary aluminum facility in 20 years.
The capacity is close to 350.000 tons per year.
The municipality owns the quay infrastructure and storing areas. The total terminal area is 4-6
hectares and there are satisfactory expansion opportunities, mainly to the west.
The ship draft is more than
14 m. and the quay length is
380 m. 2/3 (approximately)
of the quay length is blocked
by a dry bulk conveyer belt,
handling inbound raw
materials for Alcoa. This may
represent a potential conflict
for other vessels, due to
Alcoa’s first refusal rights
when calling at the berth.
Figure 4-6: Alcoa Fjarðaál
The port is equipped with one mobile container crane handling approximately 28 lifts per hour. There
are sufficient lifting and moving equipment at the port, including 2-3 reach stackers.
There are plans to extend the quay structure by building an adjacent quay. Drawings/calculations are
made by IMA. Further development depends on acceptable market conditions.
Figure 4-7: New container quay in Mjóeyri (planned)
Existing multipupose quay
(container and dry-bulk)
New 140 m. container quay
(planned)
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North Atlantic Container Service
Figure 4-8: The Port of Reydarfjordur/Mjóeyri (August 2009)
Eimskip runs the stevedoring activity for Alcoa at the port, - like:
• Unloading of alumina vessels
• Loading/unloading of container vessels
o Alcoa (container/bulk), Eimskip and Samskip
o 3-4 vessel calls per week
o Total operation 1.000-1.200 lifts/week
• Container yard operation (all container moves within the
Alcoa area)
• Stuffing and stripping of containers
Figure 4-9: Mobile crane for container handling (Mjóeyri, August 2009)
4.1.4 Torshavn (Faeroe Islands)
The port of Torshavn (Tórshavnar havn) is Faeroe Islands’ major port. The port is owned by the
Municipality of Torshavn. In year 2000 the neighboring port of Kollafjord was formally included in the
port district of Torshavn.
The port of Torshavn and the port of Kollafjord 2 are the only ports at the Faeroes which have regular
container services.
There are 14 employees at the port and stevedoring is organized by private operators. In 2008 the
port handled a total of 636.000 tons and 2,600 vessels called the port.
2 The distance between Torshavn and Kollafjord is 20 minutes by car. At present, 5.000 m 2 can be utilized for
container storing. The depth is 11,8 m along a 26 m. quay front. A new container quay/area is developed; where
the storage area is 20.000 m 2 and the quay length is 150 m. Samskip has regular sailings to Kollafjord.
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North Atlantic Container Service
The port of Torshavn is equipped with a 1,5 year old mobile container crane (owned by Faroe
ship/Eimskip), 2 container stackers (handling loaded 40 ft containers) and 3 tug masters handling Ro-
Ro vessels 3 .
The quay is 215 m. long and the depth is between 8 and 9,5 m. The storage area for containers is
25.000 m 2 .
Figure 4-10 shows the port of Torshavn and one of Eimskip’s container vessels alongside the quay.
Figure 4-11 shows the same quay during summer time, when a cruise ship is calling the port.
Figure 4-10: The Port of Torshavn - winter (2009)
Figure 4-11: The Port of Torshavn - summer (2009)
3
The ferry quay is 198 meter and the depth is 8,3 m. The ferry quay is equipped with a 25 m. wide mobile Ro-Ro
facility.
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4.1.5 Nuuk (Greenland)
North Atlantic Container Service
The Port of Nuuk is the dominating port on Greenland and the main port for Royal Arctic Lines’
container traffic. The majority of the cargo to/from Greenland is handled through Nuuk.
The container quay (existing container terminal on figure 4-12), “Ny atlantkaj”, is 100 m. long and 9,8
meter deep. The largest ship which has called the berth was 230 m. long. The container quay is
equipped with 4 reach stackers of 40-50 tons lifting capacity and a stacking capacity of 5. The port
does also have one 25 t fork lift and a few forklifts with lower capacity.
The port has in-house storing facilities for FCL and cold stores for fish products. Figure 4-12 shows the
existing container terminal as well the planned terminal east of the existing facility.
Figure 4-12: The Port of Nuuk (2009)
Existing
container
terminal
New container
terminal
(planned)
4.1.6 Port at the North American East Coast
Eimskip’s “America-route” calls at the following ports at the North American East Coast:
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North Atlantic Container Service
Argentia (Canada, New Foundland)
Argentia Harbor is a small harbor located on the east side of Placentia Bay. Argentia has three wharf
complexes that can be utilized by shippers: the Navy Dock, the marine Atlantic with its roll on/off
ramp facility and the refurbished Fleet Dock.
The Fleet Dock, where Eimskip calls, is 430 m. in length. Berth 1 and 2 is 300 m. and the depth is 12
m. The port is ice-free and connected to the hinterland by truck.
Halifax (Canada, Nova Scotia)
Halifax is strategically located near major shipping lanes operating
on the North Atlantic. Halifax has one of the largest natural harbors
in the world. The Port of Halifax has two modern container
terminals with twelve gantry cranes. Five cranes can accommodate
post-Panamax vessels. It’s a naturally deep harbor, with container
berths in the range of 13,7-16.7 m. The port is ice-free. There are
excellent intermodal rail, truck, water and air connections.
Figure 4-13: The Port of Halifax
Boston/Everett (USA, Massachusetts)
Everett is located 6.6 km north of Boston. Eimskip is calling at the Preferred Freezer Services terminal.
The working pier is 112 m and the draft is 6,7 m. The port has a 22,000-pallet-position facility, with
an extensive freezer capacity.
It accommodates imported containers and trailer loads of freight, and up to 15 refrigerated boxcars
per week. The three-railcar siding is serviced directly by CSX Monday to Friday. In addition, a biweekly
container line calls directly at the facility.
Richmond (USA, Virginia)
The port of Richmond is centrally located on the East Coast in Central Virginia, halfway between
Maine and Florida. The dock has 483 m. wharf length and 7,6 m. depth alongside. There are excellent
rail, truck and water connections. The port of Richmond has selected a new terminal operator from
October 1, 2009; Port Contractors, Incorporated (PCI).
4.1.7 Other ports
There are also other ports that may be of interest when further developing the container service.
Several ports have exhaustive plans for their development and new/other services may be connected
to “The North Atlantic Container Service”.
Without going into the details, we mention the following ports:
• Murmansk
o Large Russian dry bulk port with railway connection and ambitions to develop new
East-West container shipping services
• Kirkenes (Norway)
o Norwegian port closely located to the Russian border. Potential when it comes to
transshipping Russian cargo
• Sortland
o Medium sized, multipurpose port in Northern Norway
• Tromsø (Norway)
o Fishery/multipurpose port in Northern Norway. Located along the coast line
Due to the focus of the study (East-West in the Northern North Atlantic) European and Continental
ports are not mentioned. They are of course important for a dominant share of all services in the
region.
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4.2 The shipping lines in the region
North Atlantic Container Service
The main shipping lines in the northern region, carrying containers, are:
4.2.1 Eimskip (Iceland)
Eimskip, based in Reykjavík, has evolved from a shipping company into a
leading provider of transport, logistics and cold storage services (Norway.
New Foundland, Faeroes Islands and China). Through its worldwide
shipping network, Eimskip offers total transport solutions including all cargo handling (particularly
temperature controlled cargo), administration and information exchange regarding its services.
Eimskip employs 1.544 people
and operates in 16 countries.
Through its subsidiaries, Eimskip
also operates several vessels,
trucks and trailers.
Eimskip operates regular ocean
services between Iceland, the
Continent, UK, Scandinavia and
America.
Figure 4-14: Eimskip-ocean services
(2009)
The main interest when it comes to this project is Eimskip’s America route and the industrial service
between Mosjøen and Reydarfjordur.
4.2.2 Eimskip-CTG (Iceland/Norway)
Eimskip-CTG is 100% owned by Eimskip. CTG (Cold store and
Transport Group) is a former Norwegian Shipping Line
specialized in temperature controlled cargo. Eimskip-CTG AS is specialized as a total supplier to fish
brokers, fishing vessels and as a
ship owner’s agents
Eimskip-CTG has 5 Norwegian
offices and operates ocean
services, with 8 self sustained
vessels, along the Norwegian
coast, Iceland, Baltic and Europe.
Figure 4-15: Eimskip-CTG’s ocean
services (2009)
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4.2.3 Faroe Ship (Faeroe Islands)
North Atlantic Container Service
The transport company Skipafelagið Føroyar (Faroe
Ship) established in 1919, merged in 2004 with
Eimskip.
Faeroe Ships ocean services are more or less
integrated with Eimskip’s routes.
The map shows the routes which are promoted as
Faeroe Ships own routes, mainly connecting the
Faeroe Islands and southern Scandinavia, UK and the
Continent.
Figure 4-16: Faeroe Ships ocean services (2009)
4.2.4 Samskip (Iceland)
Samskip employs about 1,400 people working in more than 20
countries worldwide. Samskip is offering multimodal container logistics,
extensive container services to and from Iceland and the Faroe Islands
along with refrigerated cargo logistics and international forwarding.
While operating routes between Iceland (both Reykjavik and Reydarfjordur)/Faeroes (Kollafjord) and
Europe, their main market focus is south of the Northern region.
Samskip's partner in Northern Norway is the Norwegian shipping line Nor Lines.
4.2.5 Royal Arctic Line (Greenland)
Royal Arctic Line (RAL) was formed in 1992 with the transition of
Greenland's sea transport from being a traditional and
conventional cargo operation into becoming a fully modernized
container operation. The operation to/from Greenland is based on a sole and exclusive right from the
Greenland Home Rule to operate regular services. Therefore, RAL is the only container line calling
ports on Greenland. RAL operates services between:
• ports in Greenland
• Greenlandic ports, Aalborg and Reykjavík
• Greenlandic ports and certain overseas ports via Aalborg or Reykjavík.
Royal Arctic Line has entered into ongoing agreements with other shipping companies (like Eimskip),
and through these agreements Royal Arctic Line is able to offer the customers a variety of overseas
destinations for their cargo.
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North Atlantic Container Service
Royal Arctic Line established routes
Figure 4-17: Royal Arctic Lines ocean services (2009)
Figure 4-17 shows RAL’s services. The direct route between USA/Canada and South Greenland is not
in operation and cargo is transshipped in Reykjavik.
4.2.6 Various Lines (Norway)
There are a few shipping lines offering container services operating along the Norwegian Coast.
Chriship (privately owned) operates the only 100% container vessel in Northern Norway between
Bodø and Tromsø/Alta in a charter party with Tollpost Globe. NorLines (owned by Hurtigruten ASA
(50%) and Det Stavangerske Dampskibsselskap AS (50%) operates a fleet of multipurpose vessels
along the entire Norwegian Coast, and with various connections to the Continent. North Sea Container
line (NCL) (partly owned by Elkem) operates container vessels along the Norwegian Coast (up to
Nordland County) and south to the Continent.
See also chapter 5.5.3 for shipping lines calling at the port of Mosjøen.
4.3 Existing container services
Figure 4-18 shows the most important regular container services in the northern part of the North
Atlantic.
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North Atlantic container services 2010
Including the new North Atlantic Container Service - NACS
NOR LINES
Network of MPP-vessels (TEU capacity 26-127) sailing
along the Norwegian Coast (Kirkenes-Oslo). 28 ports are
called in Northern Norway and 24 in the south. The
services are connected to non-Norwegian ports like
Lysekil, Hirtshals, Århus, Halmstad, Copenhagen,
Rostock, Swinoujscie, Cuxhaven and Eemshaven.
©Transportutvikling AS, 2010
EIMSKIP-CTG
Regular services along the
Norwegian Coast (including
Murmansk), Iceland, Baltic’s and
Europe (Grimsby and Velsen).
CHRISHIP
Operates a small container line (ca. 80 TEU) between
Bodø and Tromsø/Alta in Norway. The route is linked to
the railway in Bodø and offers services thrice a week.
Chartered by Tollpost Globe.
ROYAL ARCTIC LINE (RAL)
Main route (Atlant) operated by container vessels
(TEU capacity 250-700) between Ålborg and
Greenland. A feeder system for other ports on
Greenland is connected to the main route.
NCL (North Sea Container Line)
Operates regular container ships along the Norwegian
Coast and to/from Rotterdam. The most northerly port is
Sørfold (north of Bodø). NCL has a weekly call in
Mosjøen (to/from Rotterdam)
SMYRIL LINE
Operates a combined ferry/Ro-Ro vessel,
where a weekly connection between
Torshavn and Seydisfjordur (North–
East Iceland) is a part of the route.
North Atlantic Container Service
Kirkenes
Murmansk
Figure 4-18: Present container services in the North Atlantic
Alta
RAL does also offer a service to US/Canada by
connecting their main route to Reykjavik and Eimskip’s
North America route.
Tromsø
Sortland
Bodø
EIMSKIP
Industrial container
service between Mosjøen
and Reydarfjordur
(Chartered by Alcoa)
Neskaupstadur
Seydisfjordur
Aasiaat
Isafjordur
Sisimiut
MOSJØEN
REYDAR-
FJORDUR
REYKJAVIK
Umeå
Nuuk
Vaasa
Ålesund
Narsaq
OSLO
Fredrikstad
Gothenburg
EIMSKIP (North America Route)
Eimskips service to North America
has only departures every 3rd week
(28 days) from Reykjavik. The
sailing schedule is as follows
FAEROE SHIP
The company is owned by
Eimskip and operates routes
between Iceland and
Europe/UK and south Norway
•Reykjavik (DEP)
•Argentia (south)
•Everett/Boston (south)
•Richmond (turning point)
•Halifax (north)
•Argentia (north)
•Reykjavik (ARR)
SAMSKIP
Samskips regular container activity is dominated by
services south of the northernmost regions. Samskip
has regular services from Reykjavik and Reydarfjordur
(via Kollefjord/Faeroe Islands) to UK/Continent as well
as services between the Continent and the southern
parts of Scandinavia. Cooperates with NorLines for
services along the Norwegian Coast.
Transportutvikling AS Page 29 of 63
Torshavn
Bergen
Qaqortoq
Nanotalik
Aberdeen
Helsingborg
Ålborg
Århus
Hamburg
Grimsby
Immingham
Velsen
Rotterdam
LONDON
E6
Bodø
Argentia
Gällivare
EIMSKIP (European routes)
Eimskip operates 3 routes in addition to the
North America route:
Mo i Rana
E12
MOSJØEN
Halifax
E45
Everett/Boston
E12
73
Oulu
New York
E4
Storuman
Legends & notes
E12
Eimskip routes
Richmond
Umeå
•Southern route between Reykjavik and
ports in UK (Immingham) and the Continent
(Rotterdam and Hamburg). This route does
also serve the Alcoa plant in Grundartangi
(close to Reykjavik)
•Northern route between Reykjavik-Faeroes
Islands- (Torshavn), Continent (Rotterdam)
and ports in Denmark (Århus) and Southern
Sweden/Norway (Helsingborg/Fredrikstad).
This route does also call Grundartangi (Alcoa)
and has a weekly (Thursday) northbound
sailing from Reykjavik to Reydarfjordur .
•Eastern route between Torshavn and Århus
Main Eimskip & Eimskip controlled routes
NACS
Vaasa
E4
Östersund
Seinäjoki
Royal Arctic Lines Atlant route
Smyril Lines connection Torshavn-Seydarfjordur
Road:
Rail:
E12
Railway connections (some)
SHIPPING LINE
Existing services (not shown on the map)
A few distances (nautical miles to/from)
Reykjavik Halifax
Gothenburg 1 152 (2) 2 923 (3)
Oslo 1 179 (3) 2 949 (4)
Mosjøen 967 (1) 2 914 (2)
Rotterdam 1 182 (4) 2 782 (1)

North Atlantic Container Service
5 The transportation concept – logistical components
5.1 Logistical idea and benefits
The basic idea is to establish an alternative, east-west, intermodal transport solution in the North
Atlantic based on an ocean service between the Port of Mosjøen in Norway, ports on Iceland for
transshipment operations and ports at the North American East Coast (NAEC). This main route may be
connected to other regions in the North Atlantic region (Greenland and Faeroe Islands) through feeder
services. It is furthermore possible to connect services to/from Europe and North West Russia to the
route.
The concept is intermodal due to various hinterland connections. Hinterland connections are most
often performed by road, but it is possible to use both road and the rail in Norway and NAEC.
There are competing alternatives for East-West transports between Norway/Sweden and NAEC.
www.transportutvikling.no
Legends:
RICHMOND (US)
BOSTON (US)
Main ocean sections:
Various sea connections
Railway connections:
Some road connections:
Project realated cities/HUB’s:
HALIFAX (CA)
ARGENTIA (CA)
Figure 5-1: The new North Atlantic Container Service and its connections
The main opportunities connected to the new transport concept are:
NACS – NORTH ATLANTIC CONTAINER SERVICE
REYKJAVIK
REYDARFJORDUR
©Transportutvikling AS, 2009
Transportutvikling AS Page 30 of 63
NUUK
TORSHAVN
MOSJØEN
UMEÅ
MURMANSK
• The market will be introduced to a new transport alternative
• There is a potential for lower costs, particularly for some market segments. Well developed
and managed, it is believed that the new transport concept could be an economically feasible
alternative.
VAASA

North Atlantic Container Service
• Current routes between Sweden/Norway and NAEC represent a deviation and the new
transport concept could be developed into a faster transport due to shorter distance for most
market segments. There is a potential for time savings.
• Greenland and Faeroe Islands could be linked up to the main route. A new alternative to
Northern Norway/Sweden will show up (eastbound) and by increasing the volumes on the
westbound trade, better frequencies may occur.
• There are potential synergies with other routes and ports, for instance new ocean routes from
Murmansk (Russia), North-South routes along the Norwegian Coast etc
• It is important to note that there is base-freight between Mosjøen and Reydarfjordur and
between Reykjavik and NAEC. NACS is not starting from scratch since the additional income
from the new service does not have to cover 100% of the costs, only the marginal costs, to
be profitable. The ambition is to put the separate elements (ocean routes, ports etc) of the
logistical chain together and show the customers one product and a seamless chain.
• The route will have positive impact on business development in the Northern region,
particularly connected to ports like Reydarfjordur and Mosjøen.
The main elements in the logistical chain are:
• The ocean legs Mosjøen-Iceland and Iceland-NAEC
• The transshipment operation on Iceland
• Ports
• Connected sea routes to the main line
• Hinterland connections in Norway
• Intermediaries/forwarders/organization/information etc
The elements/logistical components are described below.
5.2 The ocean legs – main route
The ocean legs have the following distances and transit times (port-to-port).
Distance (port-to-port) Transit time (different speed assumptions, knots)
To-from n.m. 13 15 17 19 21
Mosjøen-Reydarfjordur 690 2d 05h 1d 22h 1d 16h 1d 12h 1d 08h
Reydarfjordur-Reykjavik 343 1d 02h 0d 22h 0d 20h 0d 18h 0d 16h
Reykjavik-Mosjøen 967 3d 02h 2d 16h 2d 08h 2d 02h 1d 22h
Reykjavik-Argentia 1 580 5d 01h 4d 09h 3d 20h 3d 11h 3d 03h
Reykjavik-Halifax 1 947 6d 05h 5d 09h 4d 18h 4d 06h 3d 20h
Reykjavik-Boston/Everett 2 298 7d 08h 6d 09h 5d 15h 5d 00h 4d 13h
Reykjavik-Richmond 2 964 9d 12h 8d 05h 7d 06h 6d 12h 5d 21h
Torshavn-Reykjavik 497 1d 14h 1d 09h 1d 05h 1d 02h 0d 23h
Nuuk-Reykjavik 1 163 3d 17h 3d 05h 2d 20h 2d 13h 2d 07h
Table 5-1: Distances and sailing time
The transit time between Mosjøen and Reydarfjordur is approximately 48 hours (690 n.m.). Between
Reykjavik and the last port in USA (Richmond), the distance is 2.964 n.m. and the sailing time is 8-9
days. The first inbound port in Canada (Argentia) can be reached within 4 days.
Bringing a container, by sea, from Reydarfjordur to Reykjavik takes approximately 24 hours.
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North Atlantic Container Service
Reydarfjordur-Reykjavik (1 day)
At present there is no regular route between Reydarfjordur and Reykjavik, except one northbound
service (Reykjavik-Reydarfjordur) every week. The seaborne
connection between Reykjavik and Reydarfjordur is therefore a
challenge, even though the actual ship (Dettifoss and Godafoss)
are among the largest Eimskip vessels (1.457 TEU). Challenges
are connected to the frequency, lack of connections to Reykjavik
and the imbalanced cargo flow.
Figure 5-2: Godafoss
Mosjøen-Reydarfjordur (2 days)
Between Mosjøen and Reydarfjordur there is a weekly service, on a charter party for Alcoa. The
route is operated by “BBC Reydarfjordur”, with a TEU capacity of
165-181.
A future route will require a slightly larger vessel.
The frequency between Mosjøen and Reydarfjordur may be
acceptable for the market. The transport chain, transshipment
operation on Iceland, may cause less acceptable through times.
Figure 5-3: BBC Reydarfjordur
Reykjavik – NAEC (4-13 days)
Eimskip’s bi-weekly America-route (US and Canada) has been changed and is now being served with
only one vessel, Reykjafoss (712 TEU), on a 28 days round trip.
The ports of call are Reykjavík – Argentia – Halifax –
Boston/Everett and Richmond.
The frequency is low and it may be challenging to connect
Mosjøen-Reydarfjordur route with the America route, without
creating too long dwell-times on Iceland.
Figure 5-4: Reykjafoss
5.3 The transshipment operation on Iceland
The existing route to North America from Iceland originates in Reykjavik. A transportation chain from
Norway to North America by using this route requires that the container is moved between
Reydarfjordur to Reykjavik.
In principle this can be done by the alternatives (1-4) shown in Figure 5-5.
Alternative 1: Extending the Alcoa ship Mosjøen-Reydarfjordur to Reykjavik
This is probably the best alternative since only one transshipment operation is required. The
transloading can be done in Reykjavik without influencing the schedule of the existing North America
route. A larger ship is required and the frequency between Mosjøen and Reydarfjordur will be reduced
compared with the existing system.
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North Atlantic Container Service
It may be possible to develop a system where the ship from Mosjøen is calling Reykjavik only once a
month, for direct connection the existing North America Route, -while the remaining trips only
operates on the Mosjøen-Reydarfjordur section.
www.transportutvikling.no
Transshipment
- alternatives
1
2
3
4
Figure 5-5: Transshipment alternatives Reydarfjordur - Reykjavik
LEGENDS:
•To/from NAEC
•Alcoa route Norway-Iceland
•Road
•Feeder
Deviate
Alcoa ship
Domestic
feeder
Truck
Reydarfjordur
base port
Alternative 2: Ocean based feeder service between Reydarfjordur and Reykjavik
An ocean based feeder is possible but costly. It requires two transloading operations (Reydarfjordur
and Reykjavik) and loss of time. Except from services from Reykjavik to Reydarfjordur, there are no
existing services from Reydarfjordur to Reykjavik. It is therefore required to establish new services
and probably also changing the present service from Reykjavik to Reydarfjordur to correspond with
the new system.
Alternative 3: Truck transport from Reydarfjordur to Reykjavik
There are road connections between Reydarfjordur and Reykjavik. Technically this can be handled.
The road distance is approximately 700 km and the price for one truck load is a round ISK 180.000 or
USD 1.500. Time wise this solution may be good but a rate of USD 1.500, and two handling
operations, will not be possible on top of the ocean rates.
We consider road transport as a back-up solution or a supplement to the ocean system. There are
also environmental challenges connected to increased road transport.
Alternative 4: Making Reydarfjordur a future port of origin for North America
The idea is to do the transshipment for the Mosjøen volumes to NAEC in Reydarfjordur and not in
Reykjavik. The benefits are that you only need one transloading and that the system will not influence
the frequency of the Alcoa ship from Mosjøen to Reydarfjordur (see alternative 1). The ship will call at
Reykjavik, but not start from Reykjavik.
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North Atlantic Container Service
The challenges are connected to the existing system between Reykjavik and North America. Eimskip
has usually a bi-weekly sailing, but this is reduced to a 28-days rotation due to the global financial
situation. This means that 100% of the existing sailings have to start from Reydarfjordur. This may
also influence Eimskip’s present schedule between Island and NAEC, due to loss of time.
We do also believe that this alternative requires improvement of the quay facilities in Mjóeyri and that
one will need more volume than can be expected on shorter term.
However, this may be a realistic concept, particularly on a longer time perspective (see also chapter
5.5.4 “Russia – synergy & connections”). It is also possible that Eimskip may save some costs on
other services by using this alternative.
5.4 Ports
An effective operational ocean system relies also on the intermodal connectors. Port and port
facilities are important.
Reference is made to chapter 4.1, with an overview of the actual ports in the region was given.
The ports are not the main challenge. All ports are able to handle vessels and container volumes
within the operational scale of this project. However, improvements are advisable, particularly in a
longer time perspective.
• The ocean terminals (ports) on the NAEC are well functioning and have available capacity.
• The same can be said about the port of Reykjavik on Iceland.
• The port of Reydarfjordur has satisfactory depth, storage area and equipment. The challenge
is connected to the quay where 2/3 of the berth length is occupied by a dry-bulk conveyor
belt. Increased volumes and frequencies may cause less flexibility.
• The port of Mosjøen has limited storage areas. Satisfactory space, at least on a shorter time
perspective, may be available by reorganizing the terminal area and giving preference to
containerized cargo. The speed of the Lo-Lo operation should also be looked into due to its
impact on the entire logistical chain.
• Due to Torshavn and Nuuk’s role as smaller feeder ports, their logistical situation is less
critical than the Icelandic and Norwegian ports.
5.5 Sea routes connected to the main line
The main ocean line is defined as Norway-Iceland-NAEC. In principle, this route cannot be considered
as a traditional liner system, since it basically is built on a feeder system to/from Norway and a liner
system between Iceland and NAEC. However, for our purpose and visions, we consider this route as
the main line.
5.5.1 Faeroe Islands
The Faeroe Islands’ connection to Iceland is quite good and Eimskip/Faeroe Ship has 2 container
services (Northern and Southern) calling Torshavn.
• Northern (Godafoss and Dettifoss, 1457 TEU):
o Every Thursday from Reykjavik to Reydarfjordur (Friday) and then to Torshavn
(Saturday)
o Every Sunday from Torshavn to Reykjavik (Tuesday)
• Southern (Selfoss and Bruarfoss, 724 TEU)
o Every Wednesday from Reykjavik to Torshavn (Friday)
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North Atlantic Container Service
Samskip offers a 9 day schedule between Reydarfjordur and Kollafjord (Faeroe Islands). The route is
operated by a 1139 TEU vessel (Hvassafell).
It should also be mentioned that Smyril Line (not considered, in chapter 4.2, as a container carrying
shipping line) operates a ferry/Ro-Ro vessel between Torshavn and Seydisfjordur. Seydisfjordur is
located north of Reydarfjordur (62 km by road via Egilstadir).
5.5.2 Greenland
Greenland’s connections to Iceland are operated by Royal Arctic line (RAL). RAL’s vessels are usually
calling Reykjavik every 3-4 week on their way to Greenland, for transshipment of US/Canada cargo
as well as domestic Iceland cargo. The call on Iceland depends on the actual market situation.
5.5.3 Norway/Mosjøen
Mosjøen has two (north-south) ocean based connections,
NCL and NorLines. Both could be linked to the new service,
ref chapter 4.2.6.
NorLines is calling twice a week (one northbound and one
southbound). NCL has a weekly service between Rotterdam
and Mosjøen (two 323 TEU vessels).
Figure 5-6: NCL’s “Clarissa” (323 TEU)
NCL’s Rotterdam-Mosjøen route operates as follows:
• The northbound route departs from Rotterdam every Thursday (ARR Mosjøen on Monday).
• The southbound route departs from Mosjøen every Thursday (ARR Rotterdam on Monday).
The NCL ships have available northbound capacity. NCL has some flexibility in their schedule and
additional calls in Mosjøen are possible. NCL shows interest in the concept and may act as a partner
for the South-North leg and transshipments to the East-West route.
NorLines calls Mosjøen twice a week, one northbound and one southbound:
• Northbound, every Tuesday (from Oslo and 11 intermediate port of calls north to Mosjøen)
• Southbound (from Tromsø and 8 intermediate ports of calls south to Mosjøen)
Eimskip-CTG
Eimskip runs their own services along the Norwegian
Coast/Murmansk, through their own company Eimskip-CTG.
Eimskip-CTG operates regular sailings, as well as
tramp/spot which could be integrated in the new service,
depending on flexibility and route structures.
Eimskip-CTG operates multipurpose vessels, with some
container capacity (30-60 TEU).
Figure 5-7: Eimskip-CTG’s “Polfoss” (14 FEU/28 TEU)
5.5.4 Russia – synergy & connections
The port of Murmansk has exhaustive development plans, including new container terminals. The
port, and the Russian Authorities, are focusing on linking Russia’s eastbound railway system to Central
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North Atlantic Container Service
Asia and China. The Atlantic connection to the North American East Coast will go through the ice-free
port of Murmansk.
When developing new East-West transport concepts, Murmansk will face many of the same challenges
as other ports in the north, - which are lack of volumes and back haul cargo.
The Ocean leg from Murmansk to NAEC can be organized as a direct sailing or a transshipment
operation. If the cargo volumes are not sufficient to defend a larger vessel, a transshipment operation
on Iceland is an option. Figure 5-8 shows an illustration where the two alternatives are shown
(Source: Transportutvikling AS, Port of Murmansk, 2008).
If transshipment via Iceland becomes an alternative, the Russian cargo will contribute with containers
to the routes to/from Iceland and NAEC. This will also be a benefit to NACS’ Iceland-NAEC leg.
Russian cargo may also contribute to the development of the port in Reydarfjordur, if the
transshipment takes place at the Alcoa port in Mjóeyri.
Furthermore, the route from Murmansk can also call at intermediate ports in Norway like Kirkenes,
Tromsø and Sortland. Such a call structure can generate additional cargo for the Icelandic
transshipment operation. None of these ports will cause any major deviation for the main route
(Murmansk-Iceland) and they can easily be included in the schedule if there is cargo, the port
expenses are kept low and the loss of time does not cause difficulties for ship rotations/sailing
schedules.
Philadelphia
Transshipment or direct sailings-The NAEC
route
Boston
Halifax
Reykjavik-Halifax: 1 947 n.m.
5 days and 10 hours (15 knots)
Murmansk -Reykjavik: 1 517 n.m.
4 days and 5 hours (15 knots)
Figure 5-8: Sea transports Murmansk - NAEC
5.6 Hinterland connections in Norway
Reykjavik
Reydarfjordur
Tromsø Kirkenes
Murmansk-Halifax: 3 464 n.m.
9 days and 15 hours (15 knots)
Murmansk
Source: Transportutvikling AS, 2008
Mosjøen has rail connections north-south and excellent road connections in all relevant directions.
Transportutvikling AS Page 36 of 63
Mosjøen

Figure 5-9: Mosjøen – hinterland connections
North Atlantic Container Service
The railway line “Nordlandbanen”
operates between Bodø (north)
and Oslo (south). The line is
operated by container trains
(CargoNet) and the railway station
is located a few hundred m. from
the port. There is at present no
on-dock rail.
Only the major east-west road
connections are shown in figure
5-9 (dotted lines).
Mosjøen is located along the E6
(north-South road connection
between northern Norway and
Rome) and 2-3 different road
connections to Sweden, and
further to Finland (and Russia) by
a ferry connection (Umeå-Vaasa).
Figure 5-10 shows that the majority of cities in Västerbotten in Sweden can be connected to Mosjøen
by truck within approximately 8 hours. The map shows the two main road connections to Mosjøen
from Sweden, E12 (Blå Vägen) and County Road 73 (Krutfjellveien). The population in Northern
Sweden and Northern Finland is 1,1-1,2 million people.
•North America
•Iceland
•Faeroe Islands
•Greenland
•Europe
TRONDHEIM
©Transportutvikling AS, 2009
Bergen
Main road connections, distances and transport time: Sweden - Port of Mosjøen
•South Norway
& Europe
Mosjøen
•Northern
Norway
Oslo
Port of
MOSJØEN
Bodø
73
512 km
(7h 19m)
ÖSTERSUND
E12
578 km
(8h 16m)
SUNDSVALL
281 km
(4h 01m)
STORUMAN
ÖRNSKÖLDSVIK
SKELLEFTEÅ
Transportutvikling AS Page 37 of 63
E12
620 km
(8h 52m)
Figure 5-10: Port of Mosjøen – road connections to Sweden/Finland
Umeå
Vaasa
E45
Railway
Road
Murmansk
THE PORT OF MOSJØEN
HINTERLAND CONNECTIONS
Murmansk/
Arkhangelsk
Moscow and
Asia
E45
509 km
(7h 17m)
511 km
(7h 18m)
UMEÅ
531 km
(7h 36m)
VAASA
LULEÅ
574 km
(8h 12m)
+ ferry 4,5 h
E12
783 km
(11h 11m)
OULU

North Atlantic Container Service
5.7 Intermediaries/forwarders/organization/information etc
A broad set of intermediaries/forwarders can be used to support the new transport solution. This is a
minor challenge and the forwarding business can be handled by companies like Grieg Logistics
(majority owner of Mosjøen Industrial Terminal), Eimskip’s own organization, other forwarding
companies etc.
The organizational and sales system has to be developed prior to the start-up of the service.
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North Atlantic Container Service
6 A possible service – transportation product
Below is a draft indication of the new transport service and its assumptions.
6.1 Sea routes
The preliminary ocean transportation service is based on the following assumptions:
Ocean system Iceland-NAEC
The present rotation between Iceland (Reykjavik) and four ports at the NAEC is 28 days (Reykjavik-
Reykjavik). The four ports are:
• Argentia (Canada)
• Halifax (Canada)
• Boston/Everett (USA)
• Richmond (USA
Argentia is the first inbound port and Richmond the last. The transport time between Argentia and
Richmond is 6-7 days, depending on intermediate port calls.
Ocean system Mosjøen - Iceland
The present rotation between Mosjøen and Iceland (Reydarfjordur) is 7 days. The ambition is to
change the rotation to Mosjøen-Reydarfjordur-Reykjavik (westbound) for connections to the above
mentioned NAEC- route from Reykjavik. The roundtrip (Mosjøen-Mosjøen) will be approximately 9
days and the sailing time between Reydarfjordur and Reykjavik approximately one day. The
Eastbound trip from Reykjavik runs directly to Mosjøen without calling Reydarfjordur.
The sailing time Mosjøen-Reydarfjordur is two days, and 3 days to Reykjavik.
Connection to Greenland and Faeroe Islands
Connections to Greenland and Faeroe Islands are described in chapter 5.
6.2 The vessel size & operational consequences
The route concept depends on a larger vessel between Mosjøen and Iceland. The reasons are:
• Changed rotation from 7 to 9 days
• Additional capacity for new containers
The present vessel has a capacity of approximately 170 TEU’s and operates 52 round trips per year
(ex off-hire). By increasing the rotation time pr roundtrip to 9 days, the same vessel can perform 41
roundtrips, which is a reduction of 12.
When carrying the same TEU volume per year (for Alcoa), and reducing the number of trips, the
volume per trip will increase by 49 TEU’s, totaling a new capacity of 219 TEU’s.
Furthermore, containers from new customers (ex Alcoa) have to be added to the capacity. If we
assume 30 TEU’s (from new customers) per trip, the total capacity will be at least 250 TEU.
An ocean terminal’s capacity is a result of ship calls and cargo volumes handled and stored (not
depending on if it is existing Alcoa containers or containers from new customers). Larger volumes
have impact on handling times, terminal capacity and logistical procedures.
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North Atlantic Container Service
The handling time/crane moves in Mosjøen is at least 15 boxes per hour and maximum 28 in
Reydarfjordur. If we assume that all new containers to/from Mosjøen (30 TEU’s) are transit containers
(not loaded or unloaded in Reydarfjordur, but going to North America etc), additional containers in
Reydarfjordur per call are 49 TEU’s. In Mosjøen, the number of containers per call will increase by 79
(30+49) in and 79 out.
The figure below shows the capacity of the existing vessel (170 TEU’s), the increase in Alcoa
containers per call and the assumed number of new commercial containers. The total is approximately
250 TEU’s.
Based on the existing crane capacities, the increased port time in Mosjøen will be 10,5 hours and 3,5
hours in Reydarfjordur.
Vessel size TEUs)
300
250
200
150
100
50
0
Mosjøen
+ 10,5 hours
Transportutvikling AS Page 40 of 63
30
49
170
TEU's from new customers
"Additional" Alcoa containers due to fewer rotations
Existing vessel, BBC Reydarfjordur
Figure 6-1: Increased volumes – impact on vessel size and handling times/storing capacity
Reydarfjordur
+ 3,5 hours
The “loss of time” influences the route/rotation of the ship and the proposed 9 day rotation will be
very tight.
Nautical
miles per
round trip
Teoretical
duration
(ocean
voyage,days)
Teoretical
duration
(incl. port
time, days)
Present round trip Mosjøen-Reydarfjordur-Mosjøen 1 380 4,4 5,9
New round trip Mosjøen-Iceland-Mosjøen 2 000 6,4 8,9
Change (x) 620 2,0 3,1
Change (%) 45 % 45 % 52 %
Table 6-1: Sailing times, existing and new route
Table 6-1 shows the theoretical sailing time in 13 knots, for the existing and new route. When the
sailing distance increases by 620 n.m., we have to add 2 days sailing time to the rotation. The new
sailing time will be approximately 6,4 days. Furthermore, we have to we add the increased terminal
times in Mosjøen, Reydarfjordur and Reykjavik (we have used 12 hours in Reykjavik, which should be

North Atlantic Container Service
unproblematic if there is only 30 TEU’s loaded and 30 TEU’s discharged), - the rotation will be close to
9 days.
The tight schedule could be improved by for instance:
• increased vessel speed
• less than 12 hours in Reykjavik
• faster crane movements
• introducing a rotation longer than 9 days.
It can also be solved by a mix of actions.
If for instance the crane movements in Mosjøen changes from 15 to 28 TEU’s per hour, the theoretical
rotation for the whole round trip will change from 8,9 days to 8,3 days. This will probably require a
new crane in Mosjøen.
Due to fuel costs, increased speed is usually not the first priority by a shipping line.
6.3 The Westbound route
Feil! Fant ikke referansekilden. shows a logistical scheme and the westbound connection between
the two sea routes. The figure is based on Eimskip’s schedule for the North America route as per
ultimo 2010. It is also assumed that the route Mosjøen-Iceland can operate on a 9-day rotation and
calling both Reydarfjordur and Reykjavik.
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
NACS - Westbound route (as per ultimo 2010)
3
4
2
1
Mosjøen
2 d
2 d
2 d
2 d
Reydarfjordur
3 d
3 d
3 d
3 d
Reyk-
javik
Dwell time Iceland:
1-2 days
Dwell time Iceland:
8 days
Dwell time Iceland:
19 days
Dwell time Iceland:
0 - 1 day
Transportutvikling AS Page 41 of 63
12-28 d
11 d
Argentia
Halifax
(option)
NORWAY ICELAND CANADA USA
Figure 6-2: Westbound route – logistical scheme
15-32 d
14d
Boston
18-35 d
17 d
PORT Dep 1 Dep 2 Dep 3 Dep 4
DEP day Mosjøen 0 9 18 27
Mosjøen 0 0 0 0
Reydarfjordur 2 2 2 2
Reykjavik 3 3 3 3
Dwell time Iceland 1 19 8 2
Argentia 10 28 17 11
Boston/Everett 14 32 21 15
Richmond 17 35 24 18
Richmond

North Atlantic Container Service
The figure shows that it is possible to obtain a good connection (Iceland) every 3 rd week. The
transport time from Mosjøen to Canada (Argentia) could be 10-11 days. Boston (US) could be reached
within 14-15 days.
6.4 The Eastbound route
Figure 6-3 shows a logistical scheme and the eastbound connection between the two sea routes. The
figure is based on Eimskip’s schedule for the North America route as per ultimo 2010. It is also
assumed that the route Mosjøen-Iceland can operate on a 9-day rotation and calling both
Reydarfjordur and Reykjavik.
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
NACS - Eastbound route (as per ultimo 2010)
2
1
Richmond
Boston
(option)
Halifax Argentia
Figure 6-3: Eastbound route – logistical scheme
4 d
4 d
6 d
6 d
Dwell time Iceland:
-1 - 0 day (adjust)
Dwell time Iceland:
18 days
Dwell time Iceland:
9 days
Dwell time Iceland:
1-2 days
NORWAY ICELAND CANADA USA
The figure shows that is possible to obtain a good connection on Iceland every 3 rd week and that the
transport time from Richmond (US) to Mosjøen could be 17-18 days. From Halifax (Canada), the
sailing time to Mosjøen is approximately 13-14 days.
Transportutvikling AS Page 42 of 63
13 d
13 d
Reyk-
javik
17 d (?)
34 d
25 d
18 d
PORT Arr 1 Arr 2 Arr 3 Arr 4
DEP day Richmond 0 - - 28
Richmond 0 - - 0
Halifax 4 - - 4
Argentia 6 - - 6
Reykjavik 13 - - 13
Dwell time Iceland 2 9 18 1
Mosjøen 18 25 34 17
Mos-
jøen

6.5 A preliminary route indication
North Atlantic Container Service
Figure 6-4 shows a map of the main route where the blue line indicates the westbound route and the
green the eastbound route. A few sea- and land connections are shown by dotted lines.
Indicative transit times and frequency, for NACS, are shown in the tables (on the map).
The first table (Westbound) shows four departures from Mosjøen, every 9 th day (day 0, day 9, day 18
and day 27). The first departure (Dep. 1) can connect Argentia within 10 days and Richmond within
17 days. It will be almost the same for the forth departure, while Departure 2 And 3 will have longer
through times due to longer dwell-times on Iceland (lack of correspondence).
The second table (Eastbound) shows the same as the first table, but there is only one monthly
departure from Richmond. The frequency is low, but the transit time is acceptable for the matching
trips (every 28 day).
When the frequency between Iceland and North America improves, NACS, as a logistical chain, will
improve.
RICHMOND (US)
BOSTON (US)
HALIFAX (CA)
Westbound Mosjøen-NAEC
Sailing time (days) to Richmond per departure in Mosjøen
PORT Dep 1 Dep 2 Dep 3 Dep 4
DEP day Mosjøen 0 9 18 27
Mosjøen 0 0 0 0
Reydarfjordur 2 2 2 2
Reykjavik 3 3 3 3
Dwell time Iceland 1 19 8 2
Argentia 10 28 17 11
Boston/Everett 14 32 21 15
Richmond 17 35 24 18
Eastbound NAEC-Mosjøen
Sailing time (days) from Richmond per arrival in Mosjøen
PORT Arr 1 Arr 2 Arr 3 Arr 4
DEP day Richmond 0 - - 28
Richmond 0 - - 0
Halifax 4 - - 4
Argentia 6 - - 6
Reykjavik 13 - - 13
Dwell time Iceland 2 9 18 1
Mosjøen 18 25 34 17
ARGENTIA (CA)
Figure 6-4: NACS – route concept and transit times (main line)
Transportutvikling AS Page 43 of 63
NUUK
NACS - North Atlantic Container Service
Main route as per primo 2010
TORSHAVN
LEGENDS
Main route (Westbound)
Main route (Eastbound)
Sea connections
Hinterland connections (indications)
REYKJAVIK
REYDARFJORDUR
UMEÅ
MOSJØEN
©Transportutvikling AS, 2009
Table 6-2 is an example showing the westbound route schedule from Mosjøen to Richmond (ca. 3 950
n.m.).
The table is based on a “best case” route where the dwell-time in Reykjavik is 24 hours and terminal
handling in Reydarfjordur takes 16 hours. Port times at other ports are estimated to 12 hours. The
route is based on an average commercial speed of 13 knots.
VAASA

North Atlantic Container Service
The through time between Mosjøen and Richmond (US) is 15-16 days and 9-10 days to Canada.
NACS - OCEAN LEG (WESTBOUND)
Transportutvikling AS Page 44 of 63
Prod.by TU
Routing: Mosjøen-Reydarfjordur-Reykjavik-NAEC Ton capacity:
-
Type of cargo Container Payload:
- ave per unit
Type of vessel: Geared container vessel Tara:
- ave per unit
Average speed (knots) 13 Fill in the yellow fields in the table ? TeU:
#VERDI! at max DwT
N.m. N.m. Speed Docking Timetable
Time used (h:m) and (days)
PORT
Country to-from accum. (nm/h) (h:m) Date ETD/A to-from (h:m) acc.(h:m) acc.(days
Dep MOSJØEN NOR 0 0 13 0:00 1.6.10 12:00 0:00 0:00 0d 00h
Arr REYDARFJORDUR ICE 688 688 13 0:00 3.6.10 16:54 52:54 52:54 2d 04h
Dep REYDARFJORDUR ICE Port 688 13 16:00 3.6.10 08:54 16:00 68:54 2d 20h
Arr REYKJAVIK ICE 300 988 13 0:00 4.6.10 07:59 23:04 91:59 3d 19h
Dep REYKJAVIK ICE Port 988 13 24:00 5.6.10 07:59 24:00 115:59 4d 19h
Arr ARGENTIA NOR 1 580 2 568 13 0:00 10.6.10 09:31 121:32 237:31 9d 21h
Dep ARGENTIA NOR Port 2 568 13 12:00 11.6.10 21:31 12:00 249:31 10d 09h
Arr BOSTON/EVERETT X 718 3 286 13 0:00 13.6.10 04:45 55:13 304:45 12d 16h
Dep BOSTON/EVERETT X Port 3 286 13 12:00 14.6.10 16:45 12:00 316:45 13d 04h
Arr RICHMOND X 666 3 952 13 0:00 16.6.10 19:59 51:13 367:59 15d 07h
Dep RICHMOND X Port 3 952 13 0:00 16.6.10 16:45 0:00 367:59 15d 07h
Table 6-2: Example: westbound sailing
The schedule is to be considered as an indication of what may be possible in a future concept and
with a minimum dwell-time in Reykjavik.
As mentioned, in chapter 5.3, it may be an option to deviate the Mosjøen-Reydarfjordur route, only
once a month to Reykjavik.

7 The market
North Atlantic Container Service
Macro conditions (politics, economy, legislation etc) influence any transportation concept and the
viability of the transport corridor. These conditions are important as they have impact on the corridor’s
business climate and market conditions.
In many regions of the world, political and administrative conditions have been major obstacles when
developing international transport corridors. Compared with most other regions of the world these
conditions (for instance custom/control procedures, documentation etc) are favorable in the NORA
region.
Security issues are of crucial importance when developing transport corridors. Transport security has
been particularly in focus subsequent to the September 11 attack in New York. Security is important in
general and in particular when the container is not moving. Consequently, terminal and port security
is of importance.
AON produces global risk information related to terrorism, economy, politics etc. The map below
shows AON’s evaluation of political and economic risk in 2008. Countries marked with red and deepyellow
are considered to be high risk areas, while green and grey, indicate lower risk.
It is important to note that the new transport concept will run through countries where the risk is
considered as low (green/grey areas).
Figure 7-1: Global security
This chapter includes a market indication. The first approach is to look at the total merchandise trade
among the countries, based on public statistics. Then, we reduce this trade potential by adjusting the
figures with the population shares in the most relevant geographical market areas. The next step is to
further modify this information with information about industrial structures in the regions and specific
Transportutvikling AS Page 45 of 63

North Atlantic Container Service
information obtained from customers. Finally we make a preliminary indication of the TEU potential for
the transport route.
The market is a main condition when developing new transport concepts. Further project work will
therefore require more in depth studies of the potential market as well as agreements prior to
commercial operation.
7.1 Population
Transportation is a derivate from business and population needs. The population in the market area is
therefore an important condition when determining the routes market potential.
Table 7-1 shows the population in the market area. We have identified the mid-2009 population in
each country (Source: World Fact Book, national and regional statistics etc) which are located near
the main route. The potential market may include other countries. Most of the countries cover vast
geographical areas and the county’s entire population is therefore not relevant.
The table shows a total population, in 8 countries, of more than 360 million and a “regional”
population of approximately 107 millions. “Regional” means the share of the country population
considered as most relevant for the transport route.
Country
Population
Country Region
Comments
United States 307 212 123 80 000 000 US North East Coast (14 states)
Canada 33 487 208 25 000 000 Canadian East Coast (8 provinces/territories)
Finland 5 250 275 650 000 Lapland, North Ostrobothnia, Kainuu
Norway 4 660 539 600 000 Northern Norway and Nord Trøndelag
Sweden 9 059 651 500 000 Norrbotten & Västerbotten
Iceland 306 694 306 694 All
Greenland 57 600 57 600 All
Faroe Islands 48 856 48 856 All
TOTAL 360 082 946 107 163 150
Table 7-1: Population – market area
Population (1,000)
1 400
1 200
1 000
800
600
400
200
0
80 000 25 000
Figure 7-2: Population – market area
650
Population - NACS market area, 2009
Regional population: ca.107 million
600
500
Figure 7-2 illustrates
the “regional”
population shown in
table 7-1. The vertical
axis is cut due to the
large population
figures in US and
Canada, compared
with the other
countries.
13% of Norway’s and
6% of Sweden’s
population are located
in the regional market
area in the North.
Transportutvikling AS Page 46 of 63
307
58 49
United States Canada Finland Norway Sweden Iceland Greenland Faroe Islands

NUNAVUT
MANITOBA
North Atlantic Container Service
N.HAMPSHIRE
VERMONT
NEW YORK
PENSYLVANIA
WEST VIRGINA
Washington
VIGINIA
New York
NORTH CAROLINA
Richmond
MAINE
NEW JERSEY
DELAWARE
MARYLAND
©Transportutvikling AS, 2009
ONTARIO
QUEBEC
Ottawa
Toronto
Boston
MASSACHUSSETTTS
RHODE ISLAND
CONNECTICUT
US North East Coast
14 states
Population: ca. 80 million
Quebec
NEW FOUNDLAND & LABRADOR
NEW BRUNSWICK
©Transportutvikling AS, 2009
Canadian East Coast
8 provinces/territories
Population: ca. 25 million
PRINCE EDVARD ISLAND
NOVA SCOTIA
The huge populated regions of US
and Canada are shown on the maps
on this page. Ports called by Eimskip
are marked with Eimskip’s logo.
The US ports are Boston/Everett and
Richmond.
The US map shows the 14 states
which are located closest to the coast
line of the US North East Coast. Other
states are also relevant markets due
to excellent hinterland connections
from the port areas.
The majority of the population is
located to New York (19,5 mill.),
Pennsylvania (12,5), New Jersey
(8,7), Virginia (7,8), Massachusetts
(6,5), Washington (6,5) and Maryland
(5,6).
Figure 7-3: US East Coast
The Canadian map shows 8 eastern
provinces with a total population of
approximately 25 millions.
There are excellent hinterland
connections from Halifax, -for
instance the Canadian Nationals
railroad service to inland Canada and
the US Mid West.
Eimskip calls at the Port of Argentia
(New Foundland) and Halifax (Nova
Scotia).
The Majority of the population is
located to Ontario (13 mill) and
Quebec (7,8).
Figure 7-4: Canadian East Coast
Transportutvikling AS Page 47 of 63
Halifax
Argentia

7.2 Foreign trade – national figures
North Atlantic Container Service
By looking at Norwegian and Swedish imports and exports, we can make preliminary market crossmatrixes
which indicate the market potential for the NACS. Cargo between Iceland and US/Canada is
already transported on the existing North America route (Eimskip), while the new potential volumes
will mainly originate or have its destination in Norway and Sweden. We have used a conservative
approach and excluded Finland from the trade potential.
The evaluation starts with the total annual figures of merchandise trade. We have used metric tons
and not value, as the measurement scale. By using tons, it is possible to indicate transport work
(number of containers).
1 200 000
1 000 000
800 000
600 000
400 000
200 000
0
USA Iceland Canada Faeroes Islands Greenland
Figure 7-5: Norwegian merchandise trade – totals ex oil & oil products
Norwegian imports/exports 2008, ex. oil products
(Metric tons)
Country
Imports to
Norway
Imports to Norway
Exports from Norway
Exports from
Norway
Transportutvikling AS Page 48 of 63
TOTAL
USA 393 732 1 125 287 1 519 019
Iceland 175 227 286 217 461 445
Canada 186 774 131 176 317 950
Faeroes Islands 50 065 8 238 58 303
Greenland 1 751 130 1 882
TOTAL 807 550 1 551 049 2 358 599
The figure above shows Norwegian imports and exports from/to western markets along the NACS. We
have excluded oil products, living animals and a few other commodities which are not relevant for
container transports. However, it is still an indication and there will be commodities within the
statistical groups where containers may be less relevant.
The total east-west trade volume is approximately 2,4 million tons and the trade is imbalanced.
Exports from Norway exceed imports. Norway’s major trade partner is USA (65% of total tons). The
trade between Iceland and Norway is about 460.000 tons which is 144.000 tons more than the trade
with Canada. Faeroe Islands have some export to Norway (fish products) while Greenland’s export
shows only small figures.
The export from Norway to Iceland is (2008) to a huge extent electrical machineries and applications
(65%), while the import to Norway is mainly foodstuff & beverages (40%), oil etc from fish/fish
products (22%), commodities produced from stone, concrete, minerals (22%) and various fish
products/animal products.
The figure below shows Swedish imports and exports, which (in total for the whole country) is more
than twice the Norwegian trade (ex Norwegian oil and a few other products).

3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
500 000
0
North Atlantic Container Service
Swedish imports/exports 2008
(Metric tons)
Imports to Sweden
Exports from Sweden
Country
Imports to
Sweden
Exports from
Sweden
TOTAL
USA 1 251 919 2 742 665 3 994 584
Iceland 24 516 434 756 459 272
Canada 91 719 362 122 453 841
Greenland 1 196 123 196 124
Faeroes Islands 1 195 67 547 68 742
TOTAL 1 369 350 3 803 213 5 172 563
USA Iceland Canada Greenland Faeroes Islands
Figure 7-6: Swedish merchandise trade - totals
The total East-west trade volume is approximately 5,2 million tons and the trade is more imbalanced
than the Norwegian trade. The Swedish trade is 2,7 times more imbalanced than Norway’s and the
Swedish exports are 4 times the imports. As for Norway, the major trade partner is USA (77% of the
volume). The trade between Iceland and Sweden is about the same as between Canada and Sweden
(450-460.000 tons). Faeroe Islands/Greenland have some export from Sweden (mineral oil and
products derived from mineral oil) while there is almost no imports to Sweden from Greenland and
Faeroe Islands.
The export from Sweden to Iceland is mainly mineral oils and products thereof (81%), but also
several other commodities (foodstuff, paper, wood, furniture’s etc). The import to Sweden is
paper/paper waste (50%) and various other smaller commodity groups (fish-, metal products etc).
Figure 7-7 shows the trade value between the Atlantic Coast of America and the Nordic/Atlantic
countries. Oil products are excluded. Even though the Swedish exports (in tons) exceed the imports,
the value of imports exceeds
3 500
Export and imports NAEC-2008 - value
the exports. Norway shows
the same picture. The
3 000
Imports (USA)
Exports (USA)
Imports (Can)
Exports (Can)
reason is that
Swedish/Norwegian exports
2 500
have a relatively lower value
than the imports.
USD (1,000)
2 000
1 500
1 000
500
0
Sweden Finland Norway Iceland Greenland Faroes
Country of destination/origin
Sweden dominates the trade
with US/Canada, Finland is
no 2 and Norway no 3.
Iceland has some trade,
while Greenland and the
Faeroes one show small
figures.
Figure 7-7: NAEC merchandise
trade - value
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North Atlantic Container Service
It is interesting to note that the NAEC (US and Canada) merchandise trade (value) is distributed
according to the population share in the respective Nordic/Atlantic countries.
50 %
45 %
40 %
35 %
30 %
25 %
20 %
15 %
10 %
5 %
0 %
7.3 Foreign trade (volume) – weighted by population shares
Sweden has 47% of the
population and 47% of the
trade. Finland has 28% of
the trade and 27% of the
population, while Norway
has 21% of the trade and
24% of the population.
By using population shares,
we may therefore indicate
the trade between the
different regions.
Figure 7-8: NAEC merchandise
trade and population
The figures in the previous chapter show the total trade between the countries in 2008. The total
trade is not the potential and a geographical segmentation is made by using population shares.
Norway 12,9 %
Sweden 5,5 %
United States 26,0 %
Canada 74,7 %
Iceland 100,0 %
Greenland 100,0 %
Faroes Islands 100,0 %
The table (left) shows the population shares we have used (ref
chapter 7.1) when indicating the “relevant” market potential.
Table 7-2: Population shares – market area
By using the percentages in table 7-2, the market potential will be substantially reduced, compared
with the total trade figures. The potential annual volumes will be maximum 2% of the Swedish trade
and maximum 6% of the Norwegian trade.
By assuming that the volumes can be handled in containers (most of it can, as we have excluded oil,
living animals, various dry bulk materials etc) and that an average container has a payload of 10 tons,
an indication of the potential (TEU’s) is shown in table 7-3.
Route direction
Westbound Norway-Iceland
Eastbound Iceland-Norway
Total per year
Westbound Norway-Iceland
Eastbound Iceland-Norway
NAEC trade:
Trade and population - connected?
From/to
Sweden
Trade
Population
Sweden Finland Norway Iceland Greenland Faroes
From/to
Norway
TOTAL
9 290 8 775 18 065
2 319 6 003 8 323
11 609 14 778 26 388
229 216 445
57 148 205
286 364 651
Total per trip ( 9 days rotation)
Table 7-3: Maximum TEU potential based on population shares and Norwegian/Swedish trade
The total potential east- and westbound is around 26.000 TEU’s per year + the share of empties.
Based on a 9 days rotation between Mosjøen and Iceland, there may be 650 TEU’s at each roundtrip
(both directions).
Transportutvikling AS Page 50 of 63

Number of NACS containers (TEU's) per rotation
Country
Imports to
Norway/
Sweden
Table 7-4: Container balance per trip/per country
North Atlantic Container Service
The trade is not balanced, and 1/3 of
the containers will be eastbound. 2/3
will flow in the westbound direction,
mainly to North America.
Table 7-4 shows the separation of
Norwegian/Swedish imports/Exports by
country.
Figure 7-9 shows the same TEU-number as in table 7-4, but separated by ocean routes.
Total: 10 TEU’s
To Greenland: 90%
Exports
from
Norway/
Sweden
Source: Transportutvikling AS, 2010
Figure 7-9: Container balance per trip/per ocean route
TOTAL
USA 77 190 266
Iceland 59 150 208
Canada 53 68 121
Faeroes Islands 16 29 45
Greenland 1 9 10
TOTAL 205 445 651
Total: 387 TEU’s
To NAEC: 66%
Total: 650 TEU’s
To Iceland: 68%
Total: 45 TEU’s
To Faeroes: 64%
Legends
Exports from Norway/Sweden
Imports to/Norway/Sweden:
We may consider these figures as a maximum potential based on relevant population figures. These
potential volumes will not only be transported on the NACS route because competing routes exist (see
chapter 7.6.1).
7.4 The regional industry structure and market potential
13% of Norway and 6% of Sweden’s population are located in the regional market area in the North.
The market is not only influenced by the population, but also by the regional industrial structure and
the industry’s imports and exports.
The industry structure in northern Norway is dominated by fisheries, huge metallurgical industries and
metal industry (partially Helgeland), hydro power, oil and gas activities. There is also an extensive
mining industry, but the majority of these dry-bulk volumes are transshipped and the origin is from
Swedish mines (LKAB).
The fish industry is a huge export industry and it takes place along the entire coast of Northern
Norway. This industry consists of the ordinary fisheries and the fish farming industry. The fish farming
Industry has recently (in value) become larger than the ordinary fisheries. The Helgeland region,
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North Atlantic Container Service
where the port of Mosjøen is located, is the dominating fish farming region in Norway. The majority of
the metallurgical industries are also located to Helgeland (Mo i Rana and Mosjøen).
A future opportunity is connected to the shipments (big bags in containers) of aplite from Mosjøen to
Canada (Argentia/New Foundland). Aplite is used for various industrial purposes. In Namsskogan
(south of Mosjøen) there are large deposits of aplite. Similar deposits only exists a few other places in
the world.
The industry structure in northern Sweden is dominated by large raw material industry of mining,
metallurgy, mechanical industry and wood, paper and pulp. The majority of the large export
companies (except for mining) are located to the populated regions close to the Bay of Bothnia.
The saw mills and paper/pulp industry in Northern Sweden is an extensive export industry with
customers all over the world. A company like SCA has sales to 90 countries. SCA is the largest private
forest owner in Europe. Forest Products consist of magazine paper, newsprint, pulp, timber, solidwood
products and biofuels.
There are several companies in Northern Sweden producing sawn materials, paper and pulp; for
instance: Assidomän (several companies), Martinsons Trä, Rundviks såg, Munksunds sågverk, Sävar
såg, Kåge såg, B A Carlssons såg & hyvleri, Stenvalls trä, Seskarö sågverk, Rolfs såg & hyvleri etc.
It is also interesting to note that the northern regions of Sweden’s share of GDP and employment
more or less correspond to the population share (6%)
Economic indicator 2006 2007
Gross national product (GNP) 7,4 % 7,0 %
Employment (merchansise) 5,4 % 5,5 %
Table 7-5: Västerbottens and Norrbottens
share of Sweden (%)
We would also like to mention Northern Finland where there is a considerable wood, paper and metal
industry, as well as high-technology centers for example around the City of Oulu.
Figure 7-10 (Source: Järnvägstrafik på Nordkalotten-Vision 2025, EU/Länstyrelsen i Norrbotten,
August 2009) shows the location of the major industries at Nordkalotten. The map shows that Norway
is dominated by oil,
Råvaror
Förädling
Befolkningsrika
marknader
i främst
Västeuropa
Tung marknadPotentiell marknad
25% av vä rldens
resurser på gas
Sågverk
Mineraler
Malmer
Sten/sand/ grus
Kol/Diamanter
Olja- gasfält
Pappersmasa
Timmer/skog
Fisk
Befolkning i bef
och potentiella
marknader
fisheries, minerals etc,
while wood industry,
forest, ore are dominating
in Sweden.
Huge industries are
located in the NACS
influence zone.
Figure 7-10: Industry and
trade flows – Nordkalotten
Transportutvikling AS Page 52 of 63

7.5 Market seminar
North Atlantic Container Service
The project organized a market seminar in Umeå,
Sweden (January 26.2010). The ambition was to
introduce the NACS to, among others, the Swedish
Industry in Västerbotten and get feedback from the
industry.
The participating companies gave valuable comments
concerning the service and commercial conditions. The
companies which participated at the meeting showed
interest in the concept and informed that there are
existing volumes both to Iceland and North America.
Two companies informed that they weekly send 35-40
containers (40 ft dry) to North America (both USA and
Canada) and one company has regular transports of
liner paper to Iceland (shipments of approximately
3000 tons).
The commodities were mainly for export and only
smaller volume of imports. It is therefore important to
work with the back-haul, both for the ocean service
and trucking from Mosjøen to Sweden.
Figure 7-11: Information leaflet - market seminar in Umeå
From Northern Sweden is possible to reach inland Canada within 15-16 days by using the Hub in
Gothenburg and ACLs North America route (calling Halifax). Volumes to Iceland are often routed via
Helsingborg in southern Sweden (probably Eimskip’s Northern Route).
For one of the companies the most interesting destinations in USA is Houston and Philadelphia. The
volumes (wood materials) to Philadelphia are relevant for the NACS-service.
One of the larger companies informed that the rates for a 40 ft dry container (all in), from Northern
Sweden to USA, is approximately USD 3000-3500.
The companies also mentioned the risk of changing their current transport routes. Risk could be
connected to the fact that the route between Mosjøen and Iceland is an industrial route and the
charterers demand is the first priority. Available space should therefore be guaranteed. It should also
be made clear that this is a long term industrial operation which is not closed down due to
reorganizing of Alcoa logistics.
The companies also stressed the issue of using largest possible container sizes (45-53 feet), that the
frequency to/from North America should be improved and that Swedish transport subsidies to some
extent are in disfavor of the route through Mosjøen.
The conclusions from the meeting:
• The concept is considered interesting and the participants would like to be informed
concerning project progress
• The present rate for a 40ft dry container from Northern Sweden to US is USD 3000-3400
• Lack of frequency should/could be compensated by a lower price
• There are export volumes from Northern Sweden to Iceland and North America which could
be satisfactory for the westbound section of the route. This depends on viable commercial
conditions.
• Focus on the back-haul in a future market study, -both the sea leg and the inland trucking
• Look at the possibility to use the largest possible container sizes
Transportutvikling AS Page 53 of 63

7.6 Competition
North Atlantic Container Service
The NACS route is exposed to competition. There is an ongoing trade between the countries in the
region and this merchandise trade is transported by existing services. The competing services will still
be existing and the success of the NACS route depends on how competitive is will be with respect to
rates, through transit times and quality in general.
If competitive, NACS will capture its share of the potential volumes. But, the challenges of building up
a new deep-sea liner service should not be underestimated.
7.6.1 Competing alternatives
To/from North American East Coast
The usual transport route between North American East Coast and Norway/Sweden goes through
a port at the European Continent (Rotterdam, Antwerp etc). To/from Norway (Oslo) there are
existing feeder systems by sea. Rail and road transport is also commonly used. To/from Sweden,
land transport and trans-loading through the port of Gothenburg are dominating. Gothenburg is also
a frequently used port by Norwegian customers.
From Gothenburg there are weekly deep-sea services to North America, via European Continental
ports.
It is also possible to use existing (Eimskip, Samskip etc) services between southern Norway/Southern
Sweden and Iceland/Continent for transshipment to North America.
Greenland and Faeroe Islands can be connected to North America, either via Iceland or the European
Continent.
Northern Norway/Sweden and Iceland/Faeroe Islands
Iceland is connected through ports and regular services in South Sweden and South Norway.
Norway/Sweden and Greenland
Greenland can be connected through RAL’s route to/from Ålborg in Denmark.
7.6.2 Transit times and frequency
North America
The transit ports for the North American trade (to/from Norway and Sweden) are mainly Gothenburg
and Oslo. Gothenburg has a higher frequency than Oslo and North America can be reached from
Gothenburg without transshipping the container. Gothenburg is often the most relevant alternative,
also for Norwegian customers.
From Gothenburg, there are several shipping lines/combinations which can be used when the origin
or destination is North America.
Atlantic Container Line (ACL) operates a North Atlantic Service from Gothenburg, via the Continent
(Antwerp). This is a weekly schedule and the ports of call are shown in the table below (3 different
sailings are shown, December 2009-January 2010).
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North Atlantic Container Service
Ocean Port
Service 220
ATLANTIC CARRIER
Service 218
ATLANTIC COMPASS
Service 9217
ATLANTIC CONCERT
Hamburg .HAM 12.12.09 - 15:12 12.05.09 - 20:00
Gothenburg .GOT 12.28.09 - 18:00 12.14.09 - 21:30 12.07.09 - 22:48
Antwerp .ANT 12.30.09 - 22:00 12.16.09 - 22:00 12.09.09 - 23:54
Liverpool .LPL 01.02.10 - 22:30 12.19.09 - 23:00 12.12.09 - 18:00
Halifax .YHZ 01.10.10 - 00:00 12.27.09 - 00:00 12.19.09 - 19:00
New York .NYC 01.12.10 - 00:00 12.29.09 - 00:00 12.21.09 - 17:00
New York Faps .EWR 01.13.10 - 00:00 12.30.09 - 00:00 12.21.09 - 23:30
Baltimore .BWI 01.14.10 - 00:00 12.31.09 - 00:00 12.23.09 - 22:00
Portsmouth .PTR 01.15.10 - 00:00 01.01.10 - 00:00 12.26.09 - 13:00
Table 7-6: ACL’s westbound North America schedule from Gothenburg (Departure times)
Table 7-7 shows transit times for ACL’s North American Service. The transport time from Gothenburg
to/from Halifax (Canada) is 13-14 days, while New York can be connected within 15 days.
EASTBOUND
FROM / TO Liverpool Antwerp Hamburg Göteborg
Baltimore 12 14 16 17
Portsmouth 11 13 15 16
New York (RORO*) 14 16 18 19
New York (Container**) 10 12 14 15
Halifax
*FAPS
**Maher
8 10 12 14
WESTBOUND
FROM / TO Halifax New York Baltimore Portsmouth
Hamburg 15 17 19 20
Götborg 13 15 17 18
Antwerp 11 13 15 16
Liverpool 8 10 12 13
This is a continuous
rotation and a container
loaded in Gothenburg
will stay onboard until
its final destination. It
will not be
transshipped.
Table 7-7: ACL’s North
America Service - transit
times
From Oslo, there are no regular services to North America where transshipment can be avoided. But,
there are several shipping lines connecting Oslo to European ports, like the ARA-ports. It is possible to
use shipping lines like Unifeeder, Samskip, DFDS Lysline and others.
Since many Norwegian customers seem to prefer Gothenburg we indicate the competing transit time
as shown in table 7-8 (to Halifax).
The fastest transport from the north to Gothenburg is by usually road. Depending on where the origin
is, the road transport from Västerbotten/Nordland could be up to 1400 km. By using Umeå and Mo i
Rana as examples, the transport time is 15-30 hours, - also depending on the use of one of two
drivers.
By utilizing the weekly ACL deep sea service, the dwell time in Gothenburg may be up to one week.
The westbound sailing time from Gothenburg to Halifax is approximately 13 days.
The fastest through transit time from the north of Norway/Sweden to Halifax is therefore
approximately 15 days and additional 2 days if the destination is New York. (Usually it takes longer
time due to longer dwell-times).
Table 7-8: Transit time Northern
Sweden/Norway – Port of Halifax
ACL - NORTH ATLANTIC "A" SERVICE
Rotation & Transit Times
Road transport from Northern Norway/Sweden 15-30 hours
Dwell time Gothenburg 1-7 days
Ocean transport to Halifax 13 days
Through transport time to Halifax 15-20 days
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North Atlantic Container Service
Iceland/Faeroe Islands
From some ports in Northern Norway cargo can be picked up by existing Eimskip vessels, Nor Lines
or NCL for transshipment to Iceland through ports in Southern Norway/Sweden. There are several
alternatives, but most of them are time consuming, involve transshipments etc.
By using road transport from Northern Norway/Sweden (as above) Eimskip’s or Samskip’s services to
Iceland /Faeroe Islands can be connected in Varberg, Gothenburg, Helsingborg or Fredrikstad. The
best possible transport time is around 5-6 days to Faeroe Islands, plus one day to Iceland.
Greenland
Greenland is a different issue as the Greenland connection is only operated by RAL, and the only
connection is through Ålborg in Denmark. There is a weekly schedule from Ålborg and the sailing
time to Nuuk is approximately 7 days.
The best through time from Northern Norway/Sweden too Greenland will at least be 10 days (truck
feeder to Ålborg and RAL to Greenland).
7.6.3 Transport subsidies
Transport rates in Northern Sweden are influenced by governmental/national transport subsidies.
Västerbottens län (20-40%)
Kommun
Bidragssats i procent
Uttransport Intransport
Bjurholm 25 20
Dorotea 30 25
Lycksele 30 25
Malå 40 35
Nordmaling 25 20
Robertsfors 25 20
Skellefteå 35 30
Sorsele 40 35
Storuman 35 30
Umeå 25 20
Vilhelmina 35 30
Vindeln 30 25
Vännes 25 20
Åsele 30 25
Norsjö 35 30
International transports to/from Northern Sweden
are entitled to national transport subsidies for the
Swedish section of the transport route.
The subsidy rate depends on the location in
Sweden and the inland transport distance has to
be minimum 401 km.
Transport to/from Norway is entitled to subsidies
if the total transport distance is above 401 km.
But, subsidies are only been paid for the Swedish
share of the total distance.
The Swedish subsidy system is an obstacle when
the ambition is to perform east-west transports
between Sweden and Norwegian ports.
Table 7-9: Transport subsidies in Sweden
Table 7-9 shows the national transport subsidies (5) which can be obtained in various cities/regions
in the county of Västerbotten, both for outbound (“Uttransport”) and inbound (“Intransport”)
transports.
7.6.4 Rates
Rates paid by the customer, are composed of several elements. The freight rate (ocean carrier’s
price) is not necessarily the largest portion of the rate.
An example of a rate composition is shown in figure 7-12. In this example the ocean freight is only
15-20% of the customer’s rate. The difference is various surcharges, handling cost and pre-/on
carriage to/from the ocean terminal.
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USD
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
North Atlantic Container Service
Delivery Charges
Drayage from Terminal
Insurance Charges
Shippers Declaration
Customs Clearance
Fuel Surcharge
Warfage
Bill Of Lading
BAF Charges
THC (US)
Ocean Freight
The base rate example we have shown below is quoted as per January 2010:
CAF
The cost connected to pre carriage to
for instance a Swedish base port
(Gothenburg) is a substantial portion of
the total rate, when the industry is
located in northern Sweden or Norway.
For several clients in the north, the on
carriage to Mosjøen will be much
cheaper.
Price level/surcharges fluctuates by
time/season, macro conditions like
currency and fuel prices, from carrier to
carrier, sailing to sailing etc. Rates in
the ocean market do also depend on
competition and bargaining power. The
rates of today may not be the rates of
tomorrow.
Figure 7-12: Rate composition - example
• Transport between 4 different locations in the north, via Gothenburg and to/from US (Boston)
• 40 ft dry container (DC)
• General cargo, wood-stuff
• Fully loaded (FCL)
• CY-CY, all-in except the forwarder charge
• Pre-/on carriage by truck (sea and rail transport is possible)
Rate/Charge 40ft DC
(westbound, USD)
Bodø,
Norway
Origin
Mo i Rana, Umeå,
Norway Sweden
Storuman,
Sweden
Deep sea rate (CY-CY) 3 180 3 180 3 180 3 180
On carriage (Nor & Swe) 1 809 1 522 1 191 1 313
TOTAL THROUGH RATE 4 989 4 702 4 371 4 493
Transport subsidy 0 0 298 460
NET TOTAL THROUGH RATE 4 989 4 702 4 073 4 034
Rate/Charge 40ft DC
(eastbound, USD)
Bodø,
Norway
Destination
Mo i Rana, Umeå,
Norway Sweden
Storuman,
Sweden
Deep sea rate (CY-CY) 2 544 2 544 2 544 2 544
Pre carriage (Nor & Swe) 1 809 1 522 1 191 1 313
TOTAL THROUGH RATE 4 353 4 066 3 735 3 857
Transport subsidy 0 0 238 394
NET TOTAL THROUGH RATE 4 353 4 066 3 497 3 463
Table 7-10: Through rates Northern Sweden/Norway – US (40 ft DC)
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North Atlantic Container Service
The through rate from (westbound) various northern origins to US, through Gothenburg, is USD
4 000-5 000, which seems to be higher than the information obtained from large industrial companies
in Sweden. The on-carriage charge is 29-36% of the total westbound rate.
The eastbound rate is lower due to the difference in ocean freight. The eastbound ocean rate is 20%
lower than the westbound. The through east bound rate, including surcharges and road transport is
less than 15% lower than the westbound.
At present a 40 ft container (DC) is only 40% more expensive than a 20 ft (ocean freight).
Transport subsidies in Sweden, influences the rates, and makes inland transports in Sweden more
favorable.
Hazmat and frozen/reefer have different rates and a 40ft RF (all-in) from Halifax to Gothenburg costs
about USD 4 100. Halifax-Oslo is 3-400 USD cheaper, while we can add USD 5-600 to the
Gothenburg/Halifax rate if the origin is New Foundland.
Furthermore, New York is cheaper than Boston, and US is usually cheaper than Canada. This is the
opposite rate picture of what some could expect from the NACS, since the first inbound ports are in
Canada and the last in US. I should be less costly to operate on a shorter than a longer distance and
NACS will be very competitive to/from Canada. In practical terms, the shipping line may not consider
this situation, as long as the vessel is running on a fixed schedule. The cost of the rotation, ending in
Richmond, will almost be the same, with or without a call in Canada. The rate will therefore usually
be market related, and not distance-cost related.
But, rates are volatile and a consequence of negotiations and market strength. It is obvious that
companies with huge and regular volumes may obtain better rates than smaller companies. There
are a lot of smaller companies in the region.
7.7 The market – preliminary conclusions
The preliminary market conclusions are as follows:
Market potential indicated in TEU’s
The market potential to/from Sweden/Norway may be up 4-500 TEU’s per 9 day rotation. The
majority of the containers is westbound and goes between Norway/Sweden and North
America/Iceland. Faeroe Islands will contribute with some containers while Greenland has a limited
potential.
On a shorter term perspective the volumes will be lower.
There will be no volumes, until the service is developed and commercial viability is proven, and the
right market segments are found. Competing alternatives will take (continue to have) a share of the
market potential.
Transit times to be matched to/from Northern Sweden and Norway:
The competing transit time to North America (Halifax) is 15-20 days. This transit time is possible to
match, but not on a weekly frequency. The trough time is limited by the existing rotation between
Reykjavik and NAEC. At present NACS can match the competing alternatives every 3 rd week. When
the frequency between Iceland and NAEC improves, the NACS’ competitive position will improve.
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North Atlantic Container Service
The transit time to and from Iceland will be substantially improved and the frequency will be
competitive. For many alternatives the transit time will be reduced by more than 50%. The transit
time to/from the Faeroe Islands will also be reduced, due to quite good connection between Iceland
and the Faeroes. Greenland is more complicated due to lack of frequencies between Iceland and
Greenland. Periodically/some trips, NACS will be beneficial when it comes to transit time to/from
Greenland.
Rates to be matched:
The through rates between Northern Sweden/Norway to/from NAEC are strongly influenced by the
cost of pre-/on carriage. A transport distance of 1000-1500 km is required to connect a Scandinavian
base port.
At present, a 40ft DC container can be transported from the north to NAEC for USD 4 000 and from
NAEC at a through rate which is probably 15% lower. Larger companies may have lower rates. The
land transport portion of the rate is 30-40%.
Rates are volatile and influenced by market conditions, customer size and various other conditions.
Larger companies may have a better rate and smaller companies usually pay more for the transports.
By using the right vessel and securing some additional cargo/customers, NACS should be competitive
when it comes to rates, for market players in northern Sweden/Norway. The main reasons are:
• There is base freight (Alcoa) on the Norway-Iceland route. Only incremental costs (larger
vessel, some extra nautical miles, sales etc) have to be covered.
• The pre-/on carriage cost will be substantially reduced by using the port of Mosjøen,
compared with the existing cost of connecting a Scandinavian base port. Even if NACS cannot
match the ocean freight, the total rate can be matched due to drayage/delivery cost portion
of the rate.
In principle, and based on the present rates for land transports, NACS could be even more competitive
if the origin/destination is further north than for instance Mosjøen/Helgeland. Troms and Finnmark in
Norway and Norrbotten in Sweden should be looked closer into as relevant market areas.
If NACS can match the Northern Norway/Sweden – NAEC rates, it should also be able to match the
rates to/from Iceland and Faeroe Islands.
Rates are influenced by Swedish transport subsidies. Subsidies can be obtained if the transport
distance between the origin/destination in Sweden and Mosjøen is above 401 km. But, the distance to
Mosjøen is shorter than the distance to for instance Gothenburg, which should have positive impact
on the land transport rate.
Competitive rates, for NACS and for the NAEC trade, are more important than transit times. This is
due to the fact that there seems to be only minor differences in best-case transport time and that the
existing alternatives have a better frequency.
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8 Financial & commercial viability
North Atlantic Container Service
The route’s financial and commercial viability has to be evaluated in detail throughout the next
phases of the project work. Such evaluation should also include risk analysis.
In principle, the cost side of the new route is (probably) connected to the introduction of a larger ship
between Mosjøen and Iceland and the change in rotation (hours and calls).
Vessel capacity Mosjøen-Reydarfjordur
The new vessel (ref chapter 6.2) requires some larger TEU-capacity than the existing ship, due to
fewer rotations (52 to 41) and additional cargo (new containers). There are some costs connected to
increased capacity. Based on the assumptions used, the new vessel capacity is at least 250 TEU (+
80 TEU’s).
Distance and time consumption
The present roundtrip (Mosjøen-Reydarfjordur-Mosjøen) is 1 380 n.m. while the new roundtrip
(Mosjøen-Reydarfjordur-Reykjavik-Mosjøen) is 2.000 n.m. (+ 45%). Due to the reduction in the
number of rotations, the annual production (n.m.) will increase by 13%. The sailing distance will also
have an impact on the time consumption (main engine on) and increased volumes from new
customers will also influence the handling time at the ports where new containers are
loaded/unloaded. If the deviation to Reykjavik (from Reydarfjordur) is made only once per month,
the costs may be slightly lower.
Vessel operating costs
In the present (2009/2010) market, the TC rate for a 170 TEU ship and a 250 TEU ship are
approximately the same. This is not the usual picture and based on a longer term evaluation of the
market, the increase in TC- rate may be +USD 500-1000 per day. By assuming that the travel
dependent costs are 50% of the TC-rate, the cost increase (TC rate surplus + travel dependent
costs) per year is approximately USD 270.000 – 540.000 per year.
A potential viable business
30 new TEU’s per round trip is 60 4 single trip containers, which is 2.460 average 5 single trip
containers per year.
If the new service is able to capture 2.460 new FCL containers and the increased costs is max. USD
540.000, the average cost is USD 160 per container between Norway and Iceland.
Even though these simplified calculations do not take into consideration the risk of running the
business, overhead costs, profits, that there will be empties, container costs, sometime 10 TEU
instead of 30 etc, - it shows a potential.
USD 160 per container/TEU represents low operational vessel costs. It is comparable with the full
capacity vessel costs of operating among the largest deep-sea container vessels of today. The reason
is that the service is in operation, there is base freight and that we only have to cover the
incremental costs.
Furthermore, when the idea is that the Norway-Iceland service shall add volume to other existing
routes (like Iceland –North America, routes to the Faeroe Islands, along Norwegian Coast etc), these
routes may increase their revenue at a low variable cost basis (handling etc), - if there is available
capacity. There are obvious synergies connected to the concept.
4 One round trip consists of two single trips (one east and one west)
5 Average means the average of all containers independent on commodity, destination etc
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9 Challenges – issues to be solved
North Atlantic Container Service
There are several issues which have to be solved prior to the commercial operation. The list below
may not cover everything, but we believe the most important issues are mentioned.
These issues have to find a solution during the next phases of the projects work.
9.1 Changing the charter party and Alcoa logistics
The charter party on the route Mosjøen-Reykjavik is operated by commercial players. It is of crucial
interest that the new concept is beneficiary for, and accepted by, Alcoa and Eimskip.
Alcoa and Eimskip have to accept a change in the Charter party’s conditions (vessel sixe and rotation).
Alcoa is positive to look into the new opportunity.
It is also important to be aware of the commercial link between the existing Charter Party and the
“success” of NACS. It is probably not possible to build up NACS without Alcoa’s base freight between
Norway and Iceland. If Alcoa’s future logistics changes, and the route between Mosjøen and Iceland is
terminated (by any reason), it will be more complicated to develop the new service.
9.2 Service description – development
The service description in this document is an idea and not a product ready for sale. The service has
to be further developed and detailed.
This includes how to practically link the main route to other existing services (Faeroes, Greenland,
Continent, Norwegian Coast, hinterland connections in Norway/Sweden etc).
9.3 Commercial conditions and competition
As a part of the service description the commercial conditions have to be shown. Such conditions are
rates (various trades, commodities and container sizes), transit times, frequencies etc.
Frequency and through transit times are challenges. Rates may therefore be more important at the
initial stages of the development of the service, as low rates, to some extent, may compensate for low
frequency.
9.4 The market
The service will probably not come into operation prior to volume commitments and commercial
agreements.
A more detailed market evaluation has to be conducted prior to commercial operation. This market
study has to be based on the developed product and commercial conditions (rate, time etc).
Specific/targeted customers should be approached.
Sea transport systems are not constant and the competition has to be looked closer into and updated
information obtained.
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North Atlantic Container Service
9.5 The vessel and operational consequences
Chapter 6.2 shows that the vessel capacity may be at least 250 TEU, if we aim for 30 new containers
per trip, -on top of the Alcoa containers.
The increased number of containers influences handling time at the terminals, storage, logistical
procedures and consequently the vessel rotation.
The change of vessel requires another vessel than the present. Availability of a relevant vessel has to
be checked.
The terminal and handling capacity in Mosjøen should be closer looked into, -both with respect to
increasing the speed of container movements (STS-crane), storage capacity and logistical procedures.
Capacity imbalance is a challenge when combining two vessels in a logistical chain. The connecting
vessel needs a capacity corresponding to the number of transshipped containers. On the west bound
trade the volumes supported to the existing NAEC route is limited by the capacity of the smaller vessel
between Mosjøen and Iceland. Eastbound, it is possible to carry more containers than the smaller
vessel can carry and containers may be stored at the terminal on Iceland until the next rotation.
Losing the westbound ship on Iceland has greater impact on the through time (28 days frequency)
than losing the eastbound connection (9 days rotation).
9.6 Organizational challenges
The will be various organization issues to handle; like the role of forwarding, sales organization etc.
Committed partners have to be involved throughout the development.
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10 Recommendations & progress
North Atlantic Container Service
NACS is an opportunity. In reality, a rather unique opportunity in the north, since this transport
concept has base freight and existing vessels in operation.
Logistically, a main challenge is to connect the two rotations into a system where there are
acceptable frequencies and a competitive rate. If the frequency/transit time is not acceptable to the
market, the customer has to be compensated with lower rates. Low frequency and high rates is not
a combination which can be offered to the customers.
Furthermore, NACS cannot be successful if Alcoa’s own logistical priorities suffer, and the Mosjøen-
Reydarfjordur route continues to operate as a plain industrial service. It is very important to work
with Alcoa and develop a concept where Alcoa is comfortable.
Based on Alcoa’s acceptance and commitment from partners, the project will be ready to
continue into phase 2.
The basic elements in phase 2 are:
1. A meeting between the project initiators (Port of Mosjøen, Mosjøen Industrial Terminal,
Icelandic Maritime Administration), Alcoa and Eimskip, where the ambitions are to discuss the
challenges/opportunities and further progress.
2. Based on a positive outcome from the meeting, a “business plan” should be developed. The
important elements are:
• A detailed service description (the product) has to be developed.
• All other business plan issues like finance, organization, risk etc
• Various consequence and risk evaluations
3. A practical market approach, based on the developed service description
4. Assuming positive market feedback, the practical operation/service could commence
The meeting should be held prior to summer 2010 and the “business plan” should be completed
within a period of 6-8 months subsequent to acceptance and funding of the work.
We do also recommend that the port of Mosjøen continues with their port development
projects connected to container handling. The work should at least include STS-operation, access to
sufficient space/storage areas on shorter/longer term and logistical/stevedoring procedures. A project
where the port of Mosjøen and the port of Reydarfjordur are cooperating is probably a benefit.
Container transport is a derivate. It is a consequence of business development and cooperation
among people and the industry. A transport conference for the NORA region (and connected
markets), where NACS has an important role, may be of great value for the further development of
NACS.
We believe that both the business plan for NACS and a transport conference could be co-funded by
NORA, as work progresses from the initial project (this feasibility study).
Concept and ideas “die” if they are not kept alive. Based on a positive acceptance from Alcoa, we
believe that it is important to move fast into the next phases on the NACS development.
Transportutvikling AS Page 63 of 63