News / Carriers hit by wave of rising costs rethink N Europe box port networks

Photo: © Przemyslaw Ceglarek

CMA CGM has announced that from 15 May it will transfer its remaining vessel calls at the Polish port of Gdynia to the Baltic Hub container terminal at Gdansk.

After 15 years as DCT Gdansk, the 2.7m teu capacity two-terminal facility was renamed Baltic Hub in October, and has a third terminal, T3, under construction to be completed by 2025, boosting annual capacity to some 4.5m teu.

CMA CGM claims the terminal change will “provide better accessibility to inland transport in Poland and the surrounding countries”.

Meanwhile, as terminal operators push ocean carriers for tariff increases as their costs skyrocket due to wage settlements and huge energy price hikes, they run the risk of losing business to rivals.

Moreover, the looming demise of the 2M Alliance and the possibility of another round of liner consolidation is making port executives more anxious than normal about the outcome of their annual contract negotiations.

Indeed, carriers are using the downturn in congestion to review their hub and spoke networks in North Europe to ensure they can offer shippers operational advantages over competitors when demand rebounds. But they won’t lose sight of port  and stevedore costs  in their decision-making.

CMA CGM and its peers are critiquing the terminal pinch points of the 2021 and 2022 heavily congested periods and, where applicable, discussing rotational changes to loops or, in some cases, hub port substitutions with their east-west vessel-sharing alliance partners.

At the same time carriers are ramping up their terminal investments and tightening the terms of their stevedoring agreements.

In turn, so they can better plan their labour and weekly cargo operations, terminal operators are seeking double-digit contract rate increases, volume commitments and schedule integrity assurances from the shipping lines.

In its latest Ports and Terminal Insight analysis, Drewry says annual tariff increases obtained by the terminal operators may have mitigated some of the loss of storage revenue windfalls (an indirect benefit from port congestion), but the sharp fall in throughput so far this year is denting results.

However, the consultant said an improving economic outlook and an easing of energy costs was “expected to provide some reprieve through the second half of the year”.

Carriers, such as Maersk and Hapag-Lloyd, regularly updated customers with details of hub port quay utilisation levels and landside congestion, information in turn used by shippers to keep their customers informed of delays in the supply chain.

Apart from terminal operational updates, by far the biggest criticism of carriers during congestion peaks was a lack of communication when cargo was overlanded at ‘way ports’. In many cases relay operations back to the destination port took several weeks, resulting in split shipments, severe disruption and uncertainty in the supply chain.

It follows that, in the new commercially minded environment, carriers will want to have better contingency plans to deal with temporary hub port disruptions.