Containerships: How container shipping still has its benefits

Containerships: How container shipping still has its benefits

Rob Korteweg, Sales Director at Containerships, explains his company’s principles and philosophies.

Containerships is a Finnish container transport company, which operates throughout Europe and within the Mediterranean with a fleet of fourteen sea-going vessels and over 14,000 individual containers. They have over 45 years’ experience, and operate out of 18 offices across Europe to provide the best door-to-door service available. Containerships have dedicated terminals in Helsinki, Ghent and St Petersburg, and have their own truck fleet in Russia, Finland, the UK and Lithuania. Here, we speak to Rob Korteweg to get his thoughts on the future of the container shipping, and how the company aims to adapt to future trends within the industry.

Can you give us a brief overview of the company?

It’s a family-owned business, owned by the second generation of the Nördstrom family, who started the company in 1966 with one small 38TU vessel. Over the years we’ve introduced the new 45ft Magnum container. We integrated with Kursiu Linja in 2007 and in 2009, we bought Contaz Lines of Turkey, which is operating the IntraMed service.
We have about 14,300 units in the fleet, of different capacities – from 20ft up to 45ft. 90% of this is pallet-wide, which makes sense for our market. We have bought another 200 45ft containers, which will be delivered in week 44 of this year. We have 13 vessels now in operation. Eight are in the Baltic, and five are in the Mediterranean

How will Containerships look to reduce its carbon footprint? Does Government procedure help or hinder those goals?

In 2010, the amount of sulphur that was allowed to be emitted was reduced from 1.5% to 1.0%, so that’s of course an obligation that we have to fulfil. The new requirements will be implemented in 2015 and will see the figure lowered to just 0.1%, but that’s absolutely a necessity. We are in a process of implementing scrubber, which would clean the exhaust gases, first on one of our vessels. Of course, regulations also cover land transport. We’re following the Euro 5 and Euro 6 regulations.

Where do you see the next geographical region for growth within the industry?

We see a lot of growth in Russia, for sure. It’s one of the world’s growing markets. We want to get into a lot of the growing markets in Central Europe. We have introduced a new port recently, in Pori, Finland. That’s developing a substantial amount of new markets in the container industry. We’re looking to those kind of opportunities in the future.

How viable or potentially profitable is it to expand into the USA and Middle East regions?

It’s not coming onto the table just yet. The Middle East may overlap with our Northern Africa enterprise and our Eastern Med service, which is linking Turkey with Egypt, Libya and Tunisia. We are developing in the Eastern Mediterranean, but Russia is our core business area at the moment.

Can Containerships expand to a size larger than the 45ft Magnum container, or are you held back by legislation and/or practicality?

In the States and Australia, where you have these so-called road trains, there are possibilities to have 51 or 53ft containers. I don’t see it happening yet in Europe, to be honest. In Holland, we have extra-large trucks, of which we have over 700 on the roads. We’d like to be able to extend these into Germany if possible. However, there are already a lot of people protesting the idea as they think it is jeopardising the environment, so I don’t see it coming in the short-term. There are a lot of issues in other countries as well, not least the environmental ones. Sometimes, in countries such as Russia, it is not always possible to be able to store the 45ft containers at the warehouses.

Presumably, if a larger container were to come in, all your freight trains would have to be altered to accommodate them as well?

Absolutely. Not just that, but most ships were built to fit a certain size of container, so they’d have to be changed as well. If we don’t change the size of the train or ship, the containers wouldn’t fit properly, meaning we’d lose money by having wasted space. There are, of course, weight restrictions that we’d have to consider as well; not of the container, but of the road itself. There’s loads of legislation on that, although the entire chain is slowly coming round to the idea of the 45ft container.

Please can you give us an insight into your growth plans for the next 5 years?

Sales is the big area we’re targeting. We also want to make smarter use of the capacity of the vessel – better loading capacity, and so on. Utilisation of the vessel is also important – we want to make better use of the space onboard the ship, to maximise its potential. We need to find a balance between Russia and Western Europe, as well as increasing the scheduling of the vessels to beat off competition from truck-based solutions. We can achieve better transit time, better frequency, and so on, of the vessels.

Is rail freight the most viable option for the future transport of containers overland in terms of the environment – and are there any drawbacks?

If you look at the Russian hinterland, for example, then this is very much a viable solution. It’s helping to reduce the carbon footprint and giving us more opportunities in Russia and the CIS countries, but it does unfortunately come with a few drawbacks. Rail isn’t always the cheapest option, especially over shorter distances, so we have to find the distance that makes the most economic sense. It’s not always that obvious to use rail. 99% or so of ports have rail connections, but not every customer is located near a railway station! On the other hand, you can load up a train a lot more, as there are hardly any weight restrictions on railways.

You have the problem in the UK of the entire rail network being privatised – meaning different companies are in control of each separate bit of line. On the Eurasian mainland, we’re all connected to the same bit of land, so rail freight is a more enticing proposition, especially as all rail gauges in Europe are the same, apart from in Russia and Spain.

If you could change one piece of legislation to help the future of Containerships, what would that be?

One of the biggest issues is that there is not a level playing field between sea shipping and trucking, with regards to paperwork. As a short-sea vessel operator, there is a lot more paperwork and legislation than companies using trucks. That means it’s probably more appealing to someone trying to transport something to use a truck rather than our ships. That should change, in my opinion.

Finally, what are your thoughts on the report by The Boston Consulting Group, which says that container shipping companies should try to adopt more disciplined business practices before they can think about making an economic recovery?

In the olden days, the core of our business was simple port-to-port shipping. That’s now something we’re trying to change. We want to expand our complete door-to-door service, and become a complete logistics provider, instead of just a carrier. It’s important now, more than ever, to listen to our customers’ needs. Their requirements all differ, but ultimately come back to the same thing – they all want the complete door-to-door service, including everything that’s in between. If that includes the multimodal shift, then so be it. If it includes some warehousing, or rail transport, then we’ll have to work out a way of doing it. You could say we’re heading for a more 3PL-style model. It’s just not enough to say ‘we can offer a service from Rotterdam to St Petersburg’ – we have to offer an entire chain of logistics, including the pre-carriage, the documentation, warehousing, everything.