On the horizon

Large scale: the arrival of Höegh Autoliners' grand car carriers has shaken up port operations Large scale: the arrival of Höegh Autoliners' grand car carriers has shaken up port operations

AJ Keyes asks how ports should prepare for the new 8,500 ceu class of car carriers

The new 'Horizon' class of pure car and truck carriers (PCTC) being delivered to Höegh Autoliners will be the biggest automobile (and ro-ro) vessels in service and will carry 8,500 car-equivalent units (ceu) per sailing. These new ships will increase the number of vehicles shipped between ports on the major pure truck and car trade routes.

The trend of moving more cargo per ship voyage is now an established operating need for many different types of shipping commodity. The container industry, for example, has seen continued growth in the number of units handled, with the current largest tonnage of 19,400 teu set to be exceeded with the 20,000 teu-barrier being broken. The rationale for these ever-larger ships is simple: to gain better economies of scale through larger shipment and in doing so, improve operating and overall company profits. PCTCs now want a piece of the action.

In addition to the unique design, the Panama Canal is also going to be an important factor moving forward for these cargoes, according to Andrew Penfold, project director at Ocean Shipping Consultants, part of Royal HaskoningDHV. “Car carriers have evolved from the 1960s when they were first introduced and clearly have a distinctive look about them. They have tended to grow in height, giving them a very 'boxy' appearance.

“The expansion of the Panama Canal is a step-change in the shipping industry. For PCTCs the critical limitation, namely the maximum allowed beam, will increase from 32.2 metres to 49 metres. This is part of the reason we are now seeing the 8,500 ceu vessels.”

There is no doubt that improved profitability is a sizable attraction for the major car carriers. Of the largest operators, Wilh Wilhelmsen Holding group reported a Q2 2014 profit of $80m, down from the $106m recorded one year earlier. The Q3 prediction is similar. Hoegh Autoliners reported a net loss of $12.8m for Q2 2014, which compared with a loss of $13.5m for the comparable period one year earlier. And K Line's car shipments for 2014 were predicted to be flat for the second consecutive year, which will impact projected profitability, noting the operator’s desire to seek a more diverse cargo base beyond just cars.

 

Buying spree

Based on recent orders, it is clear that the major PCTC operators are pressing ahead with an expansion or renewal fleet programme, involving larger vessels. The shipping line perspective can be understood – improved economies of scale and profitability – and industry operating trends will reflect the situation with fewer ports of call and larger exchanges of cargo. However, there are two issues for ports and terminals that find themselves faced with calls from larger PCTC vessels: infrastructure at the port to berth the ship and cargo handling activities landside.

To get an idea of the size of the new Höegh Autoliners ships, the new Horizon class PCTC units constructed by Xiamen Shipbuilding Industry (XSI) in China will be 199.9m LOA, have a breadth of 36.5m and draw 9.35m. All ports and terminals on its schedule will have to prepare to handle that length, breadth and draft.

It can be seen that the length remains under 200 metres and the design draught is less than 10 metres, but these factors have little impact on infrastructure to the port partner. In all major existing locations worldwide, the ship length is unchanged and the water depth is catered for, especially in key locations like the US East Coast where the ports are seeking to be 'big-ship' ready for the Panama Canal expansion.

As Mr Penfold states: “The only difference is that the 'big-ship' issue on the US East Coast is dredging and deepening for container ships that need the required 50-feet (15.2m) of water depth. PCTC’s will, therefore already be catered for.”

 

Storage demands

The part of the port or terminal infrastructure that is going to be more affected by the larger carrying capacity is the storage space required for the vehicles once they have left the quayside (for imports) or are onboard (for exports).

The car carrying industry is land-intensive. Anthony Davison, a former terminal manager at the Port of Tilbury in the UK, where Hyundai imports all of its vehicles into the UK, notes: “Yard space for storing cars is the major issue landside. The larger the load, the greater the space needed for storage. The same yield per acre for cars and ro-ro cannot be applied like containers which can be stacked. In addition, for cars the optimum lay-out for a zero-damage policy during storage must be combined with effectively utilising every last piece of land - albeit that the site must be secure at all times. The higher the load, the greater this intensity will become.”

Clearly, the demands of this land intensive cargo operation will remain the key issue that any port or terminal serving these larger PCTC will have to deal with as they come into service. Another challenge for ports is ensuring that best operating practice is maintained, even if the volume per ship call increases, as it will do with a fully laden Horizon-class ship.

 

Best practice

Best practice operating metrics need to be followed for an increasing numbers of cars, bearing in mind that the growing trend for a more mixed cargo (such as tracked units) will influence this optimal process for vehicles. Best practice includes the following:

  • While the distance between the ship and the storage area will vary depending upon terminal design and space available, the optimal distance between storage compound area and vessel (and vice versa) must be utilised. If the vessel is too close to the storage compound and there are too many drivers, the operational efficiency will be negatively impacted and gang size will need to be reduced;
  • The route must ensure that no vehicle crosses the path of another moving unit therefore, meaning that one-way directional flow is required. The route to the parking location should be planned to ensure that there is no reversing of vehicles as this wastes time and is a common cause of damage;
  • The storage compound must be safe and secure, fenced and with an entry/exit gate. A well-designated and planned storage compound that clearly shows how/where vehicles should be parked must also be provided. Security remains a crucial component;
  • All vehicle manufacturers operate a zero-damage policy. So, key things such as folding in door mirrors should be undertaken, together with ensuring cleanliness of vehicle drivers so as to not damage the inside.
  • Normal gang make-up should consist of one supervisor in the storage compound and one supervisor on the vessel. At least two vehicles to carry drivers from the ship back to the storage compound is normal, thereby allowing 10 vehicle drivers to be moved back to ship for the next batch of cars (for imports). Those 10 vehicle drivers are normally split into two groups.
  • The optimum terminal lay out and gang size means the time taken for each man per 'trip' from ship to storage yard and the return journey should allow for between 10 and 12 per hour.

The introduction of the new Horizon class is a continuation of the trend for moving more vehicles per sailing. Yet the pressure to ensure that there is an efficient turnaround of ships will fall on the port partners of the PCTC operator, who will need to ensure the vessel’s cargo is handled efficiently, without damage, and that the ship departs on time. As Mr Penfold concludes: “A PCTC vessel not sailing is a financial liability (to its operator).”

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