Could the recent well documented commencement of the China to Germany train open the door for a similar service all the way to our sunny Isles?
I would have thought very unlikely, DB Schenker who are running the service between Zhengzhou and Hamburg are primarily catering for the German electronic and automotive industry who are probably willing to pay a premium for a faster transit time than can be achieved by ship, whilst not expensive as airfreight. The advertised rail transit time is 17 days which presumably is rail head to railhead, compares with average eastbound sailing time of 42 days from Hamburg to Shanghai, and westbound transit time of 33 days, to which time has to be added to deliver to and from the port.
And for all those of you wondering why the eastbound ship transit time is slower than the westbound voyage, the answer is slow steaming to save fuel and costs. When container services were first introduced to the Europe Far East Trade in 1972 the 2500 teu vessel were capable of a service speed of 22 or 23 knots and set the pattern of calling and four ports at either end of the voyage to load/discharge, but excluded Chinese ports which at the time were dominated by Chinese flag conventional vessels. Over the following years the shipping lines went to a fixed day of the week departure and would have operated 7 or 8 vessels on the on a round trip of 49 or 56 days depending the Far East calling pattern, typically there would be a separate sailing to SE Asia turning at Hong Kong and a Japanese service that would also include South Korea. As China opened up these schedules were adjusted and voyage times increased, resulting in more ships and multiple weekly sailing being required. As the price of oil has risen the average speed of vessels has decreased to average 18 knots which in turn results in additional vessels which have been getting larger all the time. These larger vessels then create another problem, because to ensure a consistent level of space is available on any one schedule, all the ships have to be about the same size, so if one line introduced a vessel of 8000 teu on a schedule were the norm was 5000 teu all the vessels would be replaced with ships of same size and the old vessels cascaded to other services. With most shipping lines work together in grouping to service single or multiple global services the cascading effect was able to be managed as new markets emerged, but it also lead to the practice of each grouping ordering new tonnage to match the greater economy of scale available operating a larger vessel. With global trade booming and the banks willing to lend shipping lines huge amounts of money for ship replacement programmes there was no problem until the recession hit.
At this point it should be considered that the cost of building a large containership is only recovered after about ten years and therefore it is essential for the ship owner to ensure the vessel is employed during this time and is achieving a high utilisation factor to maximise revenue. In a balanced and mature trade such as the Trans Atlantic this is much easier to achieve largely due to the fact that size of vessel is restricted to Panamax size and the level of competition has remained fairly constant for many years. In the Far East Europe trade the size of the vessels have risen consistently as well as the number, with the situation that has now developed were the current norm is between 14000 and 18000 teu and cannot be employed elsewhere as the USA can currently only handle vessels of 10000 teu, which are the most casts offs from the trade.
When the recession hit, Europe stopped buying and the ships were suddenly sailing westbound with plenty of empty space resulting in freight rates tumbling dramatically. In this trade the westbound rate is crucial as the eastbound rates do not really cover the costs, because the of the mix of cargo and demand. In order to stem the resulting losses, the shipping lines were forced to drop sailing to keep capacity at a level to cause rates to increase. This was also combined with short term laying up of vessels as huge expense to the shipowner which at one stage resulted in about 25% of the world containership capacity being laid up.
The dropping or voiding of sailing was not popular with the shippers and consignees especially those working to just in time schedules and the resultant delays caused chaos in some quarters especially as the action seemed to be co-ordinated by the shipping lines, resulting in complaints being made to the regulatory authorities in Europe and China. Faced with ever growing mounting losses, and criticism from all quarters, the shipping lines adopted a slow steaming policy so that on the eastbound leg the vessel might sail at 12 knots instead of the usual 18 knots, or even more dramatic would be sailing via the Cape instead of Suez both of which had the effect of adding about a week to the eastbound transit time. As a result in order to maintain the weekly schedule additional vessels are deployed, so now it is quite common for 10 vessels to be deployed on a schedule with a 70 day round trip voyage reducing the need to lay up vessels.
Today the voiding or dropping of sailings continues, with the added practice now of whole schedules removed at slack periods for up to six months of the year. The shipping lines then juggle other schedules to compensate the dropped calls, but invariably the transit time is longer. This disruption and the return of port congestion, as the ports try to cope with the 18000 teu vessels results in further delays and poor schedule reliability. The rail option would seemingly be attractive although probably not very cheap, but the present uncertainty in Eastern Europe will certainly not help the service develop.
