Ro/ro carriers go big
Global pure car and truck carriers (PCTCs) have 63 vessels on order for delivery between 2014 and 2017 and 65 percent of them are post-Panamax size, according to Höegh Autoliners. The number of new buildings is down a third from the peak in 2008-2010, but the vessel size is greater.
The Norwegian roll-on/roll-off carrier is scheduled to take delivery of six Chinese-built, post-Panamax vessels in 2015 and 2016. It ordered four vessels itself and will operate two more under a 12-year charter with shipowning company Ocean Yield ASA. The new PCTCs are designed to handle larger, heavier and more complex project and breakbulk cargoes, such as oil and gas drilling, mining and construction equipment; cranes; and boats, which will enable the carrier to expand its business base.
The vessels will have among the highest car-carrying capacities (8,500 units) in the world fleet, 15 percent more than the largest ships currently operated by Höegh, according to the family-owned company. Cars will be stored on 14 decks, five of which will be adjustable.
Also featured are a new hull and propeller design to improve fuel efficiency. The main difference from older ships in terms of cargo handling is their improved ramp capacity and main deck height of 6.5 meters, Per Folkesson, president of the Americas region, said Jan. 23 in Tampa, Fla., at an American Association of Port Authorities’ workshop on changing trade patterns. The ramp can handle equipment up to 250 tons.
Oslo-based Höegh operates about 60 PCTCs, with capacity ranging from 2,300 to 7,800 car equivalent units (CEUs), and carries about 2 million CEUs per year.
There are a half-dozen global PCTC operators and a host of regional carriers.
Overall, ro/ro carriers have a combined fleet of 699 vessels with an average age of 9.8 years.
Twenty-five years ago, the average capacity of a ro/ro vessel was 3,000 units. Today, some vessels are in the 10,000-unit range.
About 82 million cars are produced globally and about 15 million to 20 million are delivered by sea, according to industry experts.
The import penetration of light vehicles sold in the United States has fallen from about 28 percent in 2009 to about 21 percent and is expected to stabilize at about 20 percent through 2018, according to Höegh. But Folkesson said planned new assembly plants in Asia will soon start churning out hundreds of thousands of cars for the U.S. market, which could raise the import-to-sales ratio and benefit PCTCs. China’s auto industry mostly makes cars for the domestic market, but is expected to aggressively export finished vehicles in the next five to 10 years, he added.
The greater vessel size and the need to serve more ports as auto manufacturers—seeking local cost advantages and proximity to markets—spread their manufacturing footprint around the globe has put pressure on the car carrier industry. As vessel operators add ports of call the economic benefit of operating giant vessels goes down and the logistics complexity goes up, logistics consultant William Kerrigan said at the conference.
Ro/ro operations are much more complex today. Each original equipment manufacturer dictates how frequently it wants service, at which ports and expectations for total transit time. Meeting those requirements becomes difficult with a static-fleet size and multiple customers. Folkesson said spreading the fleet among too many ports creates legs where vessels are not as full as needed to turn a profit.
The container sector gets around network challenges to some degree by entering into vessel-sharing alliances, which gives them greater service flexibility. But car carriers face service challenges because they don’t cooperate very often, Kerrigan explained afterwards.
Transshipment, Folkesson said, is not an option because the extra handling increases the chance of damaging vehicles, which, unlike containers, are expected to be in pristine condition upon delivery. And the feeder operations that do exist in some areas have had a hard time making money, he added.