Irish Supply Chain Developments – Spring 2020
Irish Supply Chain Developments – Spring 2020
By Howard Knott, Logistics Consultant
While COVID-19 has been the dominant issue for both users of and suppliers of logistics services, the underlying issues of meeting climate change targets and facing into a post-Brexit era have not gone away. In the air cargo area, the effects of COVID-19 have been dramatic, mainly because of the substantial proportion of cargo being shipped as ‘in-hold’ cargo in passenger aircraft. For Irish exporters and importers, the COVID-19 impact on normal cargo transport by sea has been a lot less significant. Irish ports and domestic freight transport services also continue to operate normally.
The sudden withdrawal of almost all passenger services serving airports throughout the world from mid-March has forced cargo owners to seek space with the dedicated cargo carriers. A number of airlines have followed the Aer Lingus/IAG Cargo lead of chartering out passenger aircraft to take cargo in the holds below the passenger deck, and more limited amounts within the passenger cabin mainly for the carriage of Personal Protective Equipment, though some aircraft are operating under an Australian government backed scheme to ship seafood to a number of Asian destinations.
Aer Lingus/IAG Cargo have opened daily services from Dublin to New York and Dublin to Chicago also using capacity on passenger aircraft. Exporters should note, however, that “Cargo Aircraft Only” materials cannot be shipped using such services.
The huge escalation in air freight rates from China to European destinations has led to a significant rise in demand for rail and road freight services along that corridor. Door-China to Door-Continental Europe transit times for rail are in the fifteen to twenty-day range while those for truck are slightly quicker.
Seafreight – European services
Though cargo volumes using their services have dipped over the last six weeks or so, the operators of Lo-Lo services linking Dublin, Waterford and Cork with Continental ports have basically maintained their schedules. Like the Hauliers serving British and Continental markets the operators have faced issues with being able to turn equipment round easily and this has led to expensive empty running.
Unlike the situation on the North Sea, Scandinavia and the Mediterranean, most ferry services operating into and out of Irish ports carry substantial cargo volumes. The exceptions are the Brittany Ferries services from Cork and Rosslare to Roscoff and the Irish Ferries fast ferry service linking Dublin and Holyhead. These are all seasonal services.
Irish Government funding has been secured to support the services ex Rosslare to Fishguard, Pembroke, Cherbourg and Bilbao and the Dublin/Cherbourg service. UK Government funding supports the British west coast links with Northern Ireland Ports.
CLdN introduced a weekly Cork/Zeebrugge service in April to carry both trailers and containers. The Company has also added an extra Dublin/Zeebrugge rotation. CLdN operates a “Hub and Spoke” system with ferry services from Zeebrugge to a range of Atlantic Coast and Scandinavian ports.
In March Antwerp based Fast Lines introduced a monthly breakbulk and general cargo service linking Antwerp and Drogheda. This does not carry containers but is suited to the shipment of steel products, bagged material, palletised goods and project cargoes.
Seafreight – Deep Sea
Lastest figures from Maritime Consultants Drewry show that the number of sailings on the Asia/Europe container shipping trades that have been blanked for the month of May stand at 28 vs 36 in April, This would reflect a stronger demand in both directions.
In the latter part of 2019 the shipping lines operating services, particularly those linking Europe and North America, began to suffer a slowdown of volumes but the real hit came when the normal slowdown around the Chinese New Year closedown became a much longer COVID-19 closedown.
Though much Chinese manufacturing production is back in action the volumes being shipped out are still well below normal levels. This has led to Lines “blanking” or cancelling sailings at short notice. This also affects cargo being shipped to the Far East and exporters should be careful to monitor progress of shipments and delivery times. The “blanked” sailings and consequent reduction in capacity has kept ocean freight rates high and there is little expectation that these will reduce in the short term.
The surge of oil being released onto world markets at a time when demand has fallen back sharply has led to collapse of prices of oil-based fuels. One significant effect has been that the price of low sulphur fuel oil has dropped to a level so that it does not cost significantly more than the Heavy Fuel Oil traditionally used by most ocean carriers. This means that the anticipated surge in fuel costs caused by the implementation of the IMO 2020 emission regulations has not happened.
EU Motorways of the Sea Implementation Plan
The IEA has responded to the request from the Irish Maritime Development Office (IMDO) for a response to the European Commission’s detailed proposals for the development of a new Motorways of the Sea (MoS) programme. This is linked with the revision of the TEN-T European Motorway and rail network.
The MoS programme is to focus on “sustainable maritime space” as well as seamless and smart maritime transport. The proposals, though complex in the way in which they integrate with other Community programmes, would appear to offer considerable opportunities for funding of supply chain infrastructure for Ireland.
EU EIP East-West Corridor Project
The IEA participates in this EU funded project as a sub-contractor to Transport Infrastructure Ireland (TII), assisting in the development of an Intermodal Route Planner.
There has been significant feedback from the recent series of IEA Supply Chain webinars on the vital need to address “Green“ Supply Chain issues. The project partners have now decided to seek to address the validation and measurement of the carbon footprint of shipments being sent using the routes derived from the planner.
This work is ongoing.[favorite_button]