RO-RO liners are increasingly busy in Australia, driven by the decline of the local car manufacturing sector, as well as an uptick in renewable energy projects in Queensland and South Australia.
Both Höegh Autoliners and Wallenius Wilhelmsen Ocean have boosted their ro-ro services from Europe and North America.
WW Ocean recently added a monthly call to Adelaide and Höegh has boosted its direct service to Australia and New Zealand from the US and Mexico, offering two sailings per month.
The service already calls into Brisbane, Fremantle, Melbourne and Port Kembla, with the extended port coverage aiming to support the agriculture and mining sectors, which are expected to grow.
South Australia already has sizeable natural gas fields and mines, so with vessels calling directly into Adelaide, equipment and machinery for these developments can be positioned faster and cheaper than using inland haulage.
The same could be said for the burgeoning renewable energy sector in the state; these regular calls at Adelaide will make it easier to position construction equipment and material to support renewable energy developments.
WW head of Oceania sales Paul Johnson tells Daily Cargo News its vessel Salome would be the first vessel on this service calling at Adelaide in mid-July.
“That brings our total calls to four vessels on that trade,” he says. “We have four vessels coining in from the west, so we have about eight or nine vessel calls per month coming through all Australian ports except for Adelaide, which will just get one a month.”
Mr Johnson says it has been quite some time since WW has called at Adelaide.
“We haven’t had a vessel in there for a number of years,” he says. “At the moment, we’ve been bringing vehicles into Melbourne and having them motored across, so adding Adelaide in now will alleviate that necessity.”
Meanwhile, Höegh area sales manager for Oceania Brendan Wallis tells DCN he has seen quite a bit of pent-up demand for options in the trade, hence its increase of frequency in its North America to Oceania route.
“We’ve been very happy with the reception, and we’re glad to see how it’s growing voyage by voyage,” he says.
While the automotive trades make up the backbone of the cargo on the route, the range of cargo moved in the ro-ro trades is quite diverse, Mr Wallis says.
“There’s a real mix of agricultural, construction, breakbulk, it’s quite a diverse cargo range, but in general, we at Höegh see good demand and opportunities for agricultural cargo. There’s an ongoing growth in civil construction in Australia, and constant demand for civil construction equipment.”
Mr Johnson echoes the sentiment, saying WW’s automotive trade is strong, but mining and construction equipment has been very strong this year.
“We’ve seen a bit of a replacement cycle occurring, with new machinery coming out of Europe and North America,” he says. “Mining and construction has been the big increase this year, but how long it will continue for, we’ll just have to wait and see.”
Mr Johnson says he’s keeping his ear to the ground about what’s happening in the mining sector, and WW would look at adding ports if there was a need to support inbound units in Queensland.
“We’re also looking at potential opportunities on how we get cargo in closer to mine sites on the west coast as well. Obviously, our vessels are too big to call at the likes of Dampier and those ones, and [there is] quite a big road transit from Fremantle north, so we’re constantly keeping our ear to the ground with what’s happening with the market.”
Domestic shipping has always been a significant part of the ro-ro trade in Australia, with significant trade going in both directions.
Höegh’s Mr Wallis says the company had always done coastal shipping from east to west.
“We’ve had a lot of success and a lot of support with that trade, and now with the new service we’re also offering coastal shipping coming from east to west,” he says. “We’re offering it in both directions now.”
WW does a roaring coastal trade as well. “It’s been pretty good business – we’ve been doing two, sometimes three vessels east to west, it keeps us busy,” Mr Johnson says.
“There is a lot of repositioning of automotive equipment domestically; we also get various breakbulk cargoes – could be anything from swimming pools to steel, anything really. If we can get it on a ship, we’ll take it.”
The mighty nuisance that has been caused by that tiny, odious insect known as the brown marmorated stink bug has wreaked seasonal havoc on supply chains, and the ro-ro sector is not immune.
Mr Wallis confirms one of the major biosecurity issues the sector faces is from that malodorous bug, particularly in cargo coming from the US and Europe.
“Last year it became an issue out of Italy and therefore out of our European load ports,” he says, “because it’s a cargo origin, not a port origin issue”.
“We got through the season without any real incident, which is great, and a lot of vigilance from all of our booking staff, operational staff, port captains, etc.”
However, Mr Wallis says when one carrier has issues with biosecurity, it can impact on all the other carriers in the trade, pointing to a series of events this past summer when vessels were blocked from berthing at Auckland because of stink-bug infestations.
“While we didn’t have anything impacting on us directly, I think everyone in the trade felt some major issues around transiting Auckland Port,” he says.
“The flow-on effects are still felt now, with delays getting through Auckland, because the bottleneck just moves further up the supply chain with the processers, the trucking companies, etc.”
With the Northern Hemisphere summer just beginning to heat up, stink-bug season is nearly upon us again.
Mr Wallis says Höegh has robust procedures in place, and he is pleased about how the company managed last year’s stink-bug season.
“We’re eagerly awaiting the new guidelines from the Department of Agriculture so we can make sure we’re compliant and ready to go,” he says.
Technological developments in vehicles are progressing swiftly, around the world, with electric and autonomous vehicles shaping up to be the way of the future. However, Mr Johnson explains electric vehicles are looking slow on the uptake in Australia, and they don’t require much special treatment from ro-ro liners.
“Certainly for the electric vehicles, a car is a car, and we don’t need to class them as dangerous goods on our vessels, not like when they go into containers,” he says.
“Australia has such a vast import base, everyone’s talking and looking at [electric vehicles], but we’re probably a little bit behind where everyone else is globally.
“For us, there’s no real big market for it at the moment, but we’re definitely reviewing how we can support it better.”
Mr Johnson says one of the things WW is looking at is how to make sure batteries don’t get run down on a 40-odd-day transit from Europe.
The impending sulphur cap
One issue that the entire shipping industry is looking towards is the IMO’s looming marine fuel sulphur cap, which will require all marine fuel to have a sulphur content of 0.5% or less.
Due to come into force in 2020, it is causing consternation in the industry, and ro-ro operators are not immune.
However, many are taking action, ordering ships powered with cleaner fuel, such as LNG, or fitting scrubbers to existing fleets.
A spokesperson for Höegh Autoliners says the company had reduced its fuel consumption and hence emissions per shipped cargo unit and nautical mile, by about 20%.
“By complying with the global sulphur regulations in 2020, our fleet will reduce its environmental impact even further, meaning that our customers and the society will benefit from cleaner transportation,” the spokesperson says.
“Our plan is to bunker low sulphur fuel and not to install scrubbers, at least not in the initial stage. As the majority of the world fleet will not have scrubbers in place by 2020, it is imperative that the refineries must secure enough low sulphur fuel before the end of 2019.”
WW’s Mr Johnson says the IMO sulphur cap will be a big deal and WW is also looking closely at how to comply with the new regulations.
Whatever happens on 1 January 2020, ro-ro vessels will still be calling at Australian ports, delivering the things that help roll the economy along.
This article appeared in the July edition of DCN Magazine – Ro-Ro and Car Carriers Special Report