Port costs make short-sea shipping unviable
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- Published on Saturday, 25 October 2014 20:19
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LLL
Stuart Todd | lunes, 01 septiembre 2014
Motorways of the sea services need help to compete with road, LD Lines MD Christophe Santoni tells LLL
LD Lines MD Christophe Santoni says that one of the first conditions in making ’Motorways of the Sea’ (MoS) service more competitive and facilitate their expansion is to reduce the “heavy cost” of port charges on short-sea shipping.
He was speaking following the confirmation at the end of the last week that the ro-ro company was mulling the closure later this month of its three-times weekly MoS service between Nantes-Saint-Nazaire, in France and Gijon, in Spain, due to the end of state and EU funding.
“Port charges as a whole - pilotage, mooring, stevedoring, etc. represent about 30% of the total costs. If ports are interested in attracting MoS they must contribute to making short-sea shipping less expensive through the provision of special rates.”
The likely demise of LD Lines’ MoS service has raised the issue of whether this kind of ‘environmentally friendly’ freight solution can ever be economically viable without public subsidies, faced with the competitive edge enjoyed by road haulage.
The French and Spanish governments have invested €15 million apiece into the Nantes St Nazaire-Gijon MoS since its launch in September 2010 with the service also receiving a further €4 million through the EU’s Marco Polo programme. Without this financial cushion the MoS would have posted annual net operating losses of €6 million.
The closure of the service from mid-September is a possibility but as yet is not official, Santoni said. “With the two governments, we continue to look for solutions and a business plan that would enable us to maintain the service without recourse to public money or with less of it,” he told Lloyd’s Loading List.com.
He said experience over the past four years had shown that the Nantes-Saint-Nazaire-Gijon MoS is appreciated by customers with high load factors - a total of around 100,000 trucks have been taken off the roads. But hauliers agree to take the ship based on the sole condition that it is no more expensive than road transport, he added.
“LD Lines has invested heavily in trying to find a system that would allow us to reduce operating losses - in anticipation of the end of public subsidies - through optimising the frequency and schedules of the ships. Earlier this year, we connected Poole, in the UK and Rosslare, in southern Ireland, to the MoS’ itinerary in order to broaden its market reach, but it hasn’t been enough,” Santoni said.