HOME of Volvo, and half way between Oslo and Copenhagen, the Swedish Atlantic harbour at Gothenburg is well placed to capitalise on its position as Scandinavia's biggest seaport.
With 2M and G6 alliance ships making direct calls, it is well on its way to fulfil its ambition to become the biggest and most prosperous port in the region.
Direct calls from Hong Kong's OOCL, part of the G6 alliance, have been in place for some time, but recently, 2M's Mediterranean Shipping Company (MSC) will make direct calls starting with the 19,000-TEU MSC Maya this month.
"We are extremely pleased that MSC will be sailing between Asia and Gothenburg using its largest ships," said Magnus Karestedt, Port of Gothenburg chief executive.
"This means a great deal for the competitiveness of Swedish industry as it is these vessels that offer direct services to the Far East and other parts of the world," said Mr Karestedt.
Today, Gothenburg has a balanced annual trade of 850,000 TEU, and it expects the new shipping alliances to deliver greater volumes, which in turn which will bring a greater proportion of direct calls - far more than the 50 per cent it has today.
There is little fear that slack season cancellations will affect that. "Cancelled sailings will be covered with other loops when the 'normal Gothenburg loop' is cancelled," said Claes Sundmark, the port's vice president for the containers, ro-ro and rail.
"All shipping lines I have spoken to have confirmed that all loops will be sailing with their normal frequency, but covered by alternative loops in some weeks," he said.
"We and our terminal operator APM Terminals Gothenburg have invested heavily in increased and upgraded capacity in recent years," he said.
"Additional rail capacity with two new RMG [rail mounted gantry] cranes, two additional super-postpanamax ship to shore cranes, upgraded terminal areas and quays," he said.
"This includes new handling equipment, a double track for rail is being built to/from the port etc. A new port entrance has also been built with new road infrastructure.
"Except from the double track for rail - still under construction - almost all the investments are finalised," Mr Sundmark said.
With alliances, cargo for Sweden's main port can be amassed by six sales teams and put on a single ship, creating a critical mass to justify a direct call. Which in turn, benefits from the containerised exports bound for the Far East waiting on the dock.
This differs from the usual scenario of a multiplicity of sales teams working for a multiplicity of shipping lines putting what little they have collectively collected for Sweden on a multiplicity of ships in such small quantities that it only justifies feeder services from a northern range transshipment ports to Gothenburg.
Before local sales teams mostly focused on developing exports, which grew well, he said. The problem was on the import side.
"Their colleagues in China and Hong Kong were selling the full network of the alliance line, they didn't yet have the knowhow of the loop to Gothenburg," said Mr Sundmark.
"So it took some time before they consolidated everything for Gothenburg in Loop 3. They had five different loops and Loop 3 called directly at Gothenburg," he said.
"They continued to make Gothenburg bookings on Loop 4 and Loop 5 before they realised that Loop 3 was going directly to Gothenburg - so there was a delay on the imports.
Mr Sundmark reminds us that the Gothenburg volume to and from China takes 35.7 per cent of total imports to Sweden and 12 per cent of total exports from Sweden.
With shipping alliances, new efficiencies are possible, he said. Now each liner's independent sales team can put Swedish cargo on the Gothenburg ship on which they share slots.
Once amassed, that designated ship with its Swedish cargo can skip a port on a loop, and go to Gothenburg directly instead of some other port on the regular rotation.
Such arrangements can be replicated, providing direct calls to other ports with good export potential, which would not otherwise merit direct sailing without shipping alliances making it possible.
"OOCL by itself cannot come here with a 9,000-TEU vessel. Nor can NYK or Hapag-Lloyd. But by joining their volumes together in the alliance, they have enough to justify a direct call," he said.
There are problems, he conceded. "Alliances are demanding for us, because if we talk of Ocean Three, all three must think the port of Gothenburg is the right approach, then add Gothenburg and drop Qingdao, Ningbo or maybe Dubai," he said.
"It is demanding having the lines agree to this within the alliance. With all the alliance members, if they put their volumes together, they have enough to make it," he said.
Gothenburg took time to develop this approach and more time to convey, or educate sales teams to the possibility. They were then only dealing with a direct call from the G6 Alliance from China.
"2M will make a direct call from Japan, which is very good because Japan has a high demand for high-value sawn timber. Japan is a big export market for us and on the way back its [Shenzhen] Yantian and Shanghai - it's a good import load and it's a good export load," he said.
In regard to feeder growth, what Mr Sundmark wanted was feedering into Gothenburg for transshipment out - filling direct calling ocean carriers with backhaul cargo.
"So now we feeder out. That would be very important," he said.
Those feeders are from Norway with seafood and other natural resources. Also from the Swedish interior, there will be a steady flow of forest products by rail and road, consolidated in containers at Gothenburg.
Sweden is the world's third biggest exporter of lumber, pulp and paper after Canada and the US
Looking at import goods, when the port receives a big vessel, its containers are taken to nearby import facilities, and once deconsolidated, the empties are taken to an export area to be re-filled.
Fast ship turnarounds are a constant demand, of course, but what is wanted even more today by shipping lines is fast turnaround for their boxes
"Equipment management is very important and that is why we think we can bring value to customers by offering a fast turnaround. It's something we have developed, and now we discuss it with shipping lines. They say it is 'music to their ears'. One of them actually said that," said Mr Sundmark.
"We have more exports than imports, which means that you could fill every box that came in, and if you can do that in the port area, you will have a very fast turnaround on the container," he said.
"We have the facilities, we have a very good infrastructure and there's also big investments going on to raise capacity, new roads, trains and so on. So we have the facilities, a great distribution system, everything in place - so it's very easy to set up."
Because it has space, Gothenburg doesn't have the problems Hong Kong has. It can spread the containers over a larger area, making them more accessible.
"Last year the standard carrier operation for the port meant we stack two or three high. It's easy to move a container and find one," he said.
This shortens dwell time in port. "With this kind of setup, we're quite flexible for incoming, outgoing and quick delivery to customers. At APMT [APM Terminals] they have managed to increase the crane productivity and that's the main focus for them."
Mr Sundmark dismissed the idea of containerising at the paper mills deep in the northern hinterland.
"Shipping lines don't want to send their containers up there. They want to have them - that's what they like. It's easier to containerise at a special facility rather than at the paper mill. They send out hundreds of thousands of TEUs every year."
"The target for next year is 30 crane moves per hour. And 30 moves an hour is quite a good, an excellent figure. That's why we wanted external operators to improve the productivity. We offered big operators a chance to come to the port and found APMT to be the best one," said Mr Karestedt.
Looking to future, Gothenburg is planning LNG terminals beginning next year.
"I also hope we have more logistics centers around the port, good for imports in this area with the export area for wood products close to the port so we can handle a very fast turnaround to improve that even more," said Mr Sundmark.
He also pointed to a growing "cassette" traffic, categorized as a type of palletised ro-ro conveyance made up of big units that can take up to 80 tonnes each, designed for high volume, low value commodities.
In a word, waste, typically wastepaper that cannot be disposed of legally in the UK but can be shipped to Gothenburg and turned into fuel to generate electricity.
While much depends on Gothenburg's ability to sell carriers on making direct calls - raising them from the 50 per cent level they are today - there are other factors at play. One is impressed with the port's ability to profit from burdensome regulations, turning garbage into money in one case, and perhaps doing the same with a low-sulphur fuel mandate in another. Thus the force of their ideas in other areas may well gain traction and ultimately be realised.
The Swedish port has become a source of regional admiration. The Maritime Institute in Gdansk (MIG) in its recent report on Gdansk becoming a container hub for the Baltic, said some of the best practices can be copied from Gothenburg's Railport Scandinavia shuttle.
While many in shipping see low-sulphur fuel mandates from the UN and EU as an enormous cost factor, increasing fuel prices 60 per cent in the Baltic, English Channel and North Sea, not so the Port of Gothenburg.
Before the oil price plunge, the low-sulphur mandate was expected to wipe out a rival seagoing trade to Sweden's northern lumber yards and steel mills because it will be far too costly to have ships go north empty.
Even before oil price plunge nullified the once supposed drastic cost increases imposed by the low-sulphur fuel mandate, Gothenburg saw a silver lining in that rising shipping costs on the Baltic would drive forest products to the seaport by rail.
While that did not work out exactly as planned, Mr Sundmark said: "Due to new services and improvements, "we have been successful attracting new forest products to Gothenburg".
"The main reason is the improved service possibilities so far. If oil price levels are increased again we assume that it will be to our advantage since we can offer the services required.
"We have the capacity for growth, a great infrastructure and a strong vessel network with intra-European and overseas destinations," said Mr Sundmark.
An added bon-bon is Gothenburg's environmental discount which has been in effect all year. "We will use two different environmental indexes as a basis for the reward system - Environmental Ship Index (ESI) and Clean Shipping Index (CSI)," said the statement from the port.
"In our new Port Tariff for 2015, ships that are classified according to ESI and which have 30 points or more will receive a 10 per cent discount (based on GT). Ships that achieve green standard according to CSI will receive a 10 per cent discount (based on GT)," it said.
"In addition, there will be a discount for ships that switch to LNG. They will receive a 20 per cent discount on the Port Tariff through to December 2018. The Port of Gothenburg has for a long time believed and invested in LNG as the marine fuel of the future, a focus that has now received increased support from the EU," said the port statement.
Yet another reason to consider a Gothenburg call.
PORTS
14 December 2015 - 22:31
With MSC and OOCL direct calls, Gothenburg's assets accumulate rapidly
HOME of Volvo, and half way between Oslo and Copenhagen, the Swedish Atlantic harbour at Gothenburg is well placed to capitalise on its position as Scandinavia's biggest seaport.
PORTS
14 December 2015 - 22:31
With MSC and OOCL direct calls, Gothenburg's assets accumulate rapidly
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