European commerce will benefit from a rise in short sea shipping

Short sea shipping currently provides 40% of internal freight transport within Europe, and has been growing during the past decade

Short sea intra-European transit times will always be longer than typical road freight journeys. However, the European supply chain is increasingly becoming proficient to take into account these parameters: European commerce is highly favourable to short sea shipping (SSS), with European geography providing more than 67,000 km of coastline and very few industrial centres being more than 400km from the coast. On top of this, there are approximately 25,000km of navigable inland waterways.

SSS currently provides 40% of internal freight transport and has been growing at a moderate rate during the past decade. SSS can offer effective transportation services with low relative cost and with fewer externalities compared to road transport, which is considered to be its main competitor.

SSS is of paramount importance if the EU wishes to establish a complete and integrated system of intermodal transportation that will be able to guarantee not only free competition but also internal economic, environmental, and social cohesion.

The MacAndrews story is that the organisation’s aim to build critical mass and encourage modal shift to penetrate a segment of the transport market – the overland trailer market. Opportunities to use EU initiatives that could work with MacAndrews’ short sea model were explored and maximised. It was found that the European transport market required frequency vs. capacity; it required proactive approaches to market costs, more environmentally friendly transport options, and long-term commitments to provide real sustainability.

As a Short Sea multimodal operator, MacAndrews took what it did best as a transporter; regularly renegotiated with its hauliers to improve efficiency and reduce land-side costs, taking advantage of the lower charter markets and deployed more vessels giving more frequency, and discussed with the market about new, long-term, and environmentally-sound solutions for their supply chains. The company quickly built critical mass to enhance purchasing power with their own suppliers.

As a result, MacAndrews have not only achieved a very favourable market share in the containerised cargo market, but now MacAndrews regularly assists Shippers to convert cargo in trucks, off the road, and into specialised containers using intra-European waterways, successfully penetrating a long historical relationship between European importers and exporters and traditional trailers.
The company’s core geographic focus on Iberia today provides multiple day-of-the-week frequencies, connecting Spain and Portugal with the UK, Ireland, Sweden and the Benelux with opportunities to still expand. The ultimate goal is to provide a sailing daily to and from the UK for the Iberian Market. Via connections with our parent group, CMA-CGM, we also service Russia, the Baltics, and Scandinavia, as well as also offer dedicated sailings between Poland and UK, Ireland, Spain, and Portugal.

Strategically, our ports of call are located near the hubs of business manufacturing and MacAndrews has specifically chosen to partner with the Port of Bilbao in Spain, the ports of Leixoes and Lisbon in Portugal, the port of Gdynia, in Poland and in the UK with the Ports of Thamesport, Tilbury, Liverpool, Bristol, Hull and Greenock. With their geographic proximities so close to customers, cost-efficiencies and a quick and easy access to all regions of the UK, in a more sustainable, environmentally friendly way.

The use of 45’ high cube pallet wide Dry and Reefer containers offer the market the exact same pallet intake as a typical overland trailer, so there is no loss of cargo intake against a comparable shipment by trucks. The business model is dedicated with periods of validity that obviates the truck markets fluctuations through seasonal availability and provides long-term stability. In addition, a fixed day-of-the-week departures and arrivals offer customers better control in terms of planning collections and deliveries that can more precisely feed their supply chains.

The advantages of Short Sea shipping are many, mainly relating its ecologically positive nature compared to trucks and trailers, as it is more energy efficient. With regards to fuel efficiency, studies show that one ton of cargo per gallon of fuel will travel around 500 miles by sea as opposed to 60 miles by road. Size is the key to sea transport efficiency. The average cargo capacity of our ships is around 400 times greater than one truck/trailer, which means that only one of our voyages takes around 400 trucks off the roads. Thus, Short Sea improves congestion – The steady increase in road traffic has far outstripped any increase in infrastructure capacity, resulting in congestion and delays, increased energy consumption, safety problems, and greater social tension. Sea transport, in contrast, does not have congestion problems, and seldom causes them for others.

Customer support for our business model has enabled MacAndrews to increase service frequency on four routes in the past 12 months. Our Bilbao/Liverpool service was upgraded from 2 to 3 sailings per week, with an additional call at Bristol. Our Polish service was upgraded from 1 to 2 sailings per week between Gdynia and Hull and a third sailing to Thamesport. We implemented a new loop from Dunkerque to Portugal (via Thamesport) linking Belgian and French markets, and introduced a patented, electrified rail service between Bilbao and Murcia carrying 26 45-foot Reefers northbound and southbound (departures are twice weekly). The increased frequency has improved turnaround times for our equipment and also supported upgrades in our Spanish block train services to a total of 39 trains per week covering Madrid, Barcelona, Valencia, and Seville, including Murcia. In 2012, MacAndrews carried over 200,000 TEUs, offering customers a choice of reliable, cost-effective and eco-friendly services that combined rail, inland waterway and shipping solutions in a way that optimised their CO2 emissions. The same strategy led to a saving of 177,000 tonnes of CO2 in 2012.

New legislations, like the Eco Tax system hitting the French roads, may work to the advantage of the Intermodal Short Sea market. Environmental taxes are designed as incentives for companies to make production more environmentally sound. However, companies are able to pass on the tax burden to consumers, which means that eco-taxes lead to rising consumer prices. Shippers and manufacturers looking to maximise profits, maintain or lower end product costs will be looking at all avenues to achieve this. This could be conducive to shippers and manufacturers to broaden their options to partake in the modal shift and look into alternative methods of transportation other than truck.

There is expertise available and passion by many parties to move as many trucks and trailers off the road through Short Sea transport’s unique features where new solutions can be successfully extended to the intra-European market. So by planning for alternative lead times, a remarkable contribution to both the logistics industry and the environment is achieved, and in turn proffers many benefits to a European Shipper’s own business now, and beyond.

www.macandrews.com